Get ready for more SWFL hospitals. Florida poised to greatly deregulate health care
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SOURCE: Fort Myers News-Press
AUTHOR: Frank Gluck
Advocates of loosening state government oversight of health care scored major victories during this legislative session, foremost of which was their long sought-after repeal of restrictions on new hospital construction in Florida.
Assuming Gov. Ron DeSantis signs off on the changes, it could soon clear the way for two new health centers in south Lee County that opponents are currently suing to keep from being built.
And, health industry insiders say, other more specialized medical facilities could challenge the market dominance of the region's existing hospital systems.
House Bill 21 would end the state's Certificate of Need (or CON) review of general hospitals, such as the proposed facilities Lee Health and HCA Healthcare are proposing for Estero. This would also end such oversight of "tertiary hospital services," including new neonatal intensive care units and organ transplant centers, starting July 1.
Lee Health's Coconut Point medical campus in Estero is the planned site for a new 82-bed hospital.(Photo: Jon Austria/Naples Daily News)
CON reviews for new specialty hospitals, such as new children's health centers, would end in 2021.
Florida's nearly 50-year-old CON law requires health care providers to get state approval to build new health centers or expand certain, complex medical services. Facilities subject to this oversight include hospitals, nursing homes, hospice centers and intermediate care facilities for the developmentally disabled.
Proponents argue that ending the state's ability to veto proposed new hospitals will encourage more health care competition and, by extension, help drive down prices.
"It just makes no sense to me why the government would have a say in whether a hospital can open or not when that should be a question dictated by the market," said Rep. Ray Rodrigues, R-Estero, chairman of the House Health & Human Services Committee. "I think competition is always good for consumers."
Ray Rodrigues (Photo: David Albers/Naples Daily News)
Lee Health won state approval last year for an 82-bed hospital planned for its outpatient medical campus just south of the Coconut Point shopping center in Estero. State regulators simultaneously approved an application from HCA Healthcare for an 80-bed health center less than five miles away.
This prompted immediate objections from the Naples-based NCH Healthcare System, which is vying for a share of patients in the fast-growing area. Physicians Regional Healthcare System, another Collier County hospital operator, filed its own objections to the plan.
Those objections are still pending a decision from a state administrative law judge. A repeal of hospital reviews would presumably make those legal challenges go away.
But Lee Health, a public hospital system serving disproportionate numbers of under-insured patients, has long opposed a full elimination of state hospital reviews.
As opponents of such deregulation argue, leaving hospital construction up to the free market might allow health centers specializing in lucrative medical specialties to siphon away higher-paying patients from safety-net providers like Lee Health.
"We’ve never had an issue with competition, as long as it was fair," said Larry Antonucci, president and CEO of Lee Health. "But the way this law is written, it allows anybody to build any sized hospital without even a requirement for an emergency room, without a requirement to accept Medicaid, and without a requirement to take care of uninsured patients. So, I think it really puts us at a disadvantage.”
Dr. Larry Antonucci, president and CEO of Lee Health. (Photo: Andrew West/The News-Press)
Representatives for NCH Healthcare System, which operates the largest hospitals in Collier County and had asked the state to block the proposed Lee Health and HCA hospitals, would not comment. But the non-profit health care system has been public in its opposition to a CON repeal.
More south Lee Hospitals soon?
Lee Health has always planned to start building its new hospital, which might cost up to $140 million, in the next few years, Antonucci said.
The recently completed Lee Health - Coconut Point site already has a freestanding ER, surgical suites, outpatient clinics and a wellness center. It was designed to allow for an addition of a hospital, something a vocal group of south Lee County residents has wanted for well over a decade.
“That’s our plan right now, and we haven’t changed anything," he said. "But certainly this law can change our entire strategic focus.”
Lee Health's leadership team is expected to present a new hospital strategy to its governing board sometime this fall, Antonucci said.
More: Lee Health voices concerns over deregulation bills
HCA Healthcare, which operates 47 hospitals throughout Florida, has largely been tight-lipped about its own intentions in recent months.7 Photos
The company's 817-page application to the state last year proposed an 80-bed hospital with an emergency department and a 10-bed psychiatric care unit.
HCA also said it wanted to become the county's third receiving facility for people who get emergency mental health evaluations under the state's Baker Act. That law allows for voluntary and involuntary detentions in designated "crisis stabilization units" of people who are considered immediate risks to themselves or others.
Spokeswoman Debra Mckell would not comment on the company's current plans for a hospital or when it might actually be built.
"At this time, we are reviewing what impact the new CON deregulation legislation, if signed into law by the governor, may have on the project timeline," Mckell said.
But the Nashville-based company, the nation's largest for-profit hospital operator, is clearly serious about entering the market. It has already shelled out $52.5 million for the hospital site: 100 acres at U.S. 41 and Williams Road in Estero.
More deregulation
CON repeal was among a number of significant health care deregulation measures awaiting the governor's signature this year, a priority for House Speaker Jose Oliva, R-Miami Lakes.
Another would create two programs to allow the importation of prescription drugs from Canada and other foreign countries, subject to approval by the federal government.
The Canadian Prescription Drug Importation Program would operate under the Agency for Health Care Administration to provide a means of importing lower-cost prescription drugs from Canada to state-funded entities.
More: Lee Health and NCH Healthcare System make HealthGrades’ list of America's best hospitals
The International Prescription Drug Importation Program, operating within the Department of Business and Professional Regulation, would allow licensed general purpose pharmacies to import drugs from any country the U.S. determines has "good manufacturing practices for pharmaceutical products."
Another bill establishes the legal framework for medical professionals to treat patients using certain communication devices, including the internet. Such "telehealth" technologies are designed to fill the gaps in communities experiencing shortages of doctors and nurses.
Allowable health care services would include diagnoses, medical education, patient monitoring and transfers of medical information. This could not be done by audio-only telephone calls, email or faxes.
One more proposal allows patients to stay up to 24 hours at ambulatory surgical centers, non-hospital facilities that provide elective surgeries. Currently, they are only allowed to stay for the remainder of a given working day, and not overnight.
The bill included a number of other health care measures, including a requirement that hospitals notify patients getting treatment if they have been formally admitted or if they remain in an "under observation" status. The distinction determines how much insurers like Medicare will pay for certain services and what patients may pay out-of-pocket.
Will CON repeal lower patient costs?
CON repeal has become a national priority under the Trump administration. A recent report by the Department of Health and Human Services, which oversees Medicare and Medicaid, said such regulations "stifle innovative and more cost-effective ways to provide care while limiting choice and competition."
More: Lee Health hospital room rates rising again. Here's where that money goes
In their own analysis, Florida lawmakers cited a 2004 Federal Trade Commission/Department of Justice review of CON laws that concluded that such regulations may actually lead to higher medical costs, inferior quality, less patient access and waste.
The CON repeal bill's sponsor, Rep. Heather Fitzenhagen, R-Fort Myers, did not return calls and emails to comment on Lee Health's concerns.
That view is hardly unanimous. Opponents argue that health care is not a traditional commodity subject to free-market forces.
Patients experiencing medical emergencies don't have the luxury of shopping around for the best health center to seek treatment, they note. Many procedures, such as X-ray imaging, are ordered by doctors, not patients.
And the prices patients pay are typically decided by insurers. Medicare and Medicaid tell hospitals what they will pay for given treatments. Private insurers negotiate separately, and in private, with hospitals to set rates.
"Payment reform is the only way to effectively drive higher quality and affordable cost," said Bruce Rueben, president of the Florida Hospital Association, which opposed CON repeal. "We look forward to working with others to achieve responsible payment reforms that improve access, reduce cost and promote quality hospital services in the state of Florida."
More: Golisano Children's Hospital named a 'top' U.S. health center, one of three in Florida
Either way, Lee Health's Antonucci said the organization is prepared to deal with more hospital competition. Though, for the last 13 years, it has held a virtual monopoly on such services in Lee County.
“Our attitude has to be that, if a physician chooses to take a patient to another facility in our area, they will do so knowing that it’s an inferior facility. Period, end of story," he said. "And if we can do that then we’re going to be fine."
Follow this reporter on Twitter: @FrankGluck