Temperatures rise on repeal of CON laws

Opponents predict an oversaturation of the health care market while proponents see more access.

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  • | 4:20 a.m. July 19, 2019
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While the Northeast Florida health care market has been busy the past several years, a bill that took effect July 1, repealing most of Florida’s certificate of need laws, may make it even busier.

Florida was one of 35 states with a certificate of need law. It required hospitals to receive authorization from the Agency for Health Care Administration before building hospitals or expanding medical services once it was determined the demand in the area would be sufficient for the project’s construction. 

HB 21, which Gov. Ron DeSantis signed into law in June, eliminated CON laws for general hospitals and “tertiary services,” which can include transplant services, neonatal intensive care units and open-heart surgery, among others. The second part will take effect in 2021, repealing CON requirements for specialty hospitals.

Under the previous law, hospitals needed to apply for a CON, which could take months or years. It allowed for other hospital organizations to appeal the decision, which often led to legal battles between hospitals and the state’s Agency for Health Care Administration. 

In the past, area hospitals like UF Health and Baptist Health faced difficulties obtaining a CON. UF Health’s initial plans to build its UF Health North faced challenges in 2014 from Memorial Hospital Jacksonville that were later dropped. In 2015, Baptist Health was denied a CON to build a hospital at its Clay County medical facility. 

With the CON, it could be difficult to land approval in areas that were growing, but not yet fully established, since there needed to be a demonstrated, unmet need for the services. 

Bryan Campbell, CEO of the Duval County Medical Society, said with the repeal, it could be easier to build hospitals in growing areas like Clay County or Nocatee.

“This allows for companies to be more strategic, and get out in front of it instead of having to come back in after the fact and fight with all the CON rules,” Campbell said. “This will allow them to get out front and lead that development.”

For UF Health Jacksonville, the repeal won’t change its plans to continue developing its UF Health North campus, completing construction at Wildlight and working with the city to improve its Downtown campus, said CEO Leon Haley. It would consider looking at more options for expanding in Nocatee, where it opened a primary care facility earlier this year. 

Campbell said his organization was in favor of repealing the CON law, which is in line with the Florida Medical Association’s stance.

Some critics of the bill fear that repealing the CON will lead to an oversaturated health care market and a decline in the quality of care. Proponents say an increase in competition will lead to lower prices for consumers and more access to care.

“There’s some people that have really drawn their line in the sand, and getting rid of CON is going to be the end of medicine as we know it, and there’s going to be a hospital on every corner like there’s a Walgreens,” Campbell said. “On the flip side, there’s a lot of people in town that have to travel a long way to their closest appropriate care. I think this is an opportunity to provide better care to those individuals.”

Campbell said while it’s not clear what every company will choose to do, he expects some will take more advantage of the laws than others, but he doesn’t see the repeal leading to having too many hospitals.

Haley said he was skeptical that the repeal would bring lower prices for consumers, or to a surplus of hospitals in Jacksonville. South Florida, he said, could end up with too many hospitals. 

But Jacksonville “is already a fairly competitive market,” he said, which could become more so in the coming years. 

“Now the risk is that more of them will add facilities, and the risk for us is that the patient pie gets smaller,” Haley said. “And I think that our ability to be profitable may have some challenges.”