Will Delaware’s certificate of need law fall in 2021?

The coronavirus pandemic scuttled debate over the future of Delaware’s certificate of need law, but it is due to be revisited in the 2021 legislative session. | Photo by Natanael Melchor on Unsplash

DOVER – Opinions about Delaware’s requirements for certificates of need (CONs) for large medical expenses vary so much that at first glance some stakeholders don’t seem to be talking about the same issue.

Dr. Chris Casscells, policy director for the Caesar Rodney Institute, calls it “a blunt-force instrument that has been brutal to the price of health care in Delaware” and therefore should be eliminated.

“It never did its intended goal,” he said of the law.

Casscells wants the marketplace to judge, and noted that in the late 1990s, when the system was temporarily unfunded, multiple freestanding surgery centers were created.

Wayne A. Smith, CEO of the Delaware Healthcare Association (DHA), which represents hospitals and allied organizations, supports the intent of the regulatory process, but recommends operational changes involving quorums and staff experts.

And state Rep. Lyndon Yearick, a Kent County Republican, has changed his mind over the last five months to embrace the free market.

“If there’s a health care institution that’s willing to risk their capital and assets, I don’t know of any reasons why there should be any restrictions,” he said.

Certificates of need were put into the spotlight in 2019, when Bayhealth and Beebe Healthcare proposed emergency departments on U.S. Route 9 in Sussex County, within 10 miles of each other. The Delaware Health Resources Board, which hears applications for the projects and rules on their permissibility, denied Beebe’s application, while Bayhealth withdrew its application before a vote.

Delaware passed a CON law in 1978, following a 1975 federal mandate that such laws would improve the delivery of health care. The federal law was “based on the economic assumption that excess health care capacity directly results in health care price inflation,” a 240-page report by legislative analysts for the Joint Legislative Oversight and Sunset Committee concludes.

“States established CON programs to restrain health care costs and allow for coordinated planning of new services and construction based on a genuine community need,” the report continues. “CON programs also emphasized the importance of distributing health care services to disadvantaged populations or geographic areas that may be ignored by new and existing facilities.”

A later federal review found the law didn’t generate the desired outputs, so the U.S. government backed off in 1987, and a dozen-plus states have since dropped their CON laws.

The issue has received criticism in Delaware over the years and resurfaced here in March when it came before the state’s Sunset Committee, a legislative body that reviews agencies, committees, and boards for their continuing need. Its debate was stopped by the emergence of the coronavirus, but in May committee leaders said that its analysts are continuing to do research to be ready when work resumes, “presumably in January.”

Before that comes the Nov. 3 election, and the committee’s membership could change through election losses. Legislative leaders could appoint new committee members next year as well, said Yearick, a Sunset Committee member.

This is the Sunset Committee’s fourth review of the law and its associated board.

“Common themes from all four reviews include size of board membership, conflicts of interest, and the structure and overall need for the program,” the report concludes.

Delaware’s law covers health care expenses of more than $5.8 million, a significant change in bed capacity, acquisition of a nonprofit health care facility, and similar big-ticket items.

“There needs to be many operational changes made,” Smith, of DHA, said of the law.

The DHA is concerned that the board has problems achieving quorums; meetings are canceled or postponed; the board lacks a dedicated staff; and the hearing process “doesn’t allow for applicants to respond to questions and misstatements from the board.”

One problem with the quorums, and resulting cancellations and postponements, is board membership, said John R. Toedtman, executive director of the Caesar Rodney Institute, a conservative Delaware-focused think tank.

The board currently has three vacancies, and Toedtman said the vice chair has been vacant for two years. Five members of the public serve on the 15-member board, but others are state health officials, representatives of health care industry associations, private practitioners, and more. Part of the difficulty in reaching quorum involves members recusing themselves, he said.

As for Smith’s point on staffing, the Delaware Health Care Commission sufficiently staffs the board, according to the report.

The current debate essentially repeats what’s been said before. The commission in 1996 recommended eliminating certificates of need because they did not reduce costs. The effort failed “as the hospital association lobbied for its continuation,” the report says. Legislation changed the program to a certificate of public review.

It’s not clear what some other state leaders and stakeholders think about the future of Delaware’s CON law. Requests for comment from Gov. John Carney; Lt. Gov. Bethany Hall-Long, who is a nurse and nursing professor; the state Department of Health and Human Services; and the Delaware State Chamber of Commerce were not returned.

By Ken Mammarella

Contributing Writer