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

From Delaware Business Times

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.

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