Roper: Mullin illustrates the trouble with certificate of need laws

By Rob Roper

Kevin Mullin, chairman of the Green Mountain Care Board, appeared on the WDEV radio program “Open Mike” last week to discuss certificate of need laws in the wake of a controversy regarding Copley Hospital and its highly successful orthopedic surgery center. Copley is, apparently, generating too much revenue as the result of being highly efficient, performing more surgeries and delivering what is recognized as superior service and outcomes for patients.

Mullin’s comments demonstrate many reasons why the certificate of need process is a terrible policy and why the GMCB is incapable of managing the healthcare market. First, Vermont’s answer to rising healthcare costs is rationing care. They say it isn’t. They’d like us to think it isn’t. But it is. Here’s what Mullin said about why we need a GMCB:

We are the regulators… we have to be the ones who are putting the breaks on utilization. And so that is our role.

“Putting the breaks on utilization.” That means denying care to someone who thinks they need it. Maybe they do, maybe they don’t, but is a six-member panel in Montpelier really who we want making that decision? Mullin further reinforces the rationing argument when he says:

The cost of health care isn’t just what it costs for a given set of procedures, because you can hold that constant, but if people had more use of those procedures you can still have rising health care costs.

It’s not the cost of the procedure that’s driving up costs, it’s the number of patients utilizing the procedure. Sure. 2 x10=20; 3×10=30. But if three people need a procedure the GMCB sees the way to lower costs is to make sure only two get it. Rationing.

Mullin keeps digging this hole:

I do have some gut concerns about whether or not in some respects we’re building a “Field of Dreams”; if you build it they will come. And the reason why I say that is because what we’re not seeing is, because Copley has more orthopedic business, we’re not seeing a decline in orthopedic business elsewhere.

Now, a certificate of need (one would hope) is supposed to determine what a community’s health care needs are and make sure they are being met, though not exceeded. If you build it and they come, that’s a real world reflection of need. If Copley Hospital is demonstrating that there is a need for more orthopedic surgeries, the GMCB should be looking into expanding their CON, not revoking it as they are now. But, as Mullin confessed, that’s not really the role of the board. Their role is keep people from accessing that care.

Mullin then uses a rationale to justify clamping down on Copley that contradicts the data he cited regarding a lack of decline in other hospitals’ orthopedic output:

What I have concerns about is when hospitals – and they hate it when I use this term but I’m going to repeat it because my gut tells me that in some respects that’s what they’re doing – and that is “poach” on another hospital.

First of all, if other hospitals are not experiencing a decline in services, Copley isn’t “poaching” anything. They are filling an otherwise unmet demand. But even if they were taking customers away from other hospitals, who cares? It’s just a reflection of customers seeking the best service and outcomes – something Mullin says the GMCB wants.

So, you know, nobody here at the Green Mountain Care Board is trying to interfere with someone’s decision about where they should or shouldn’t have their surgery.

Yet, this is exactly what they’re doing. If GMCB tells Copley they can’t perform as many surgeries, the inevitable result is that some patients who want to will not be able to have their procedure done at Copley. Mullin also stated that he does not think hospitals should be able to market their services in state, which would limit patients’ ability to learn what their best options for care might be.

Mullin tries to give himself a moral “out” here by saying one option Copley has is to perform the same amount of surgeries but charge less for each one, so as not to bring in too much revenue. But, really? If you’re a doctor and are given the choice of performing three surgeries in return for $2,000 total, or two surgeries in return for $2,000 plus time for dinner with your family and the chance to see your kid’s soccer game, which option are you going to choose?

As mentioned earlier, Mullin does not like hospitals advertising their services to Vermonters. However, he also says:

What I’ve been trying to make very clear to hospitals is, if they’re bringing in business from out of state, that’s economic development.

True enough, and it’s a good thing. But in a command and control system designed to “put the breaks on utilization” locally, what this will do is create an incentive for Vermont hospitals to prioritize out-of-state patients, much like state colleges that get more money for out-of-state students, further limiting access for Vermonters. That’s a bad thing.

Finally, Mullin acknowledges:

Despite all the best efforts that everyone is making costs continue to rise.

Indeed. A study by the Kaiser Foundation determined that between 1990 and 2014, hospital expenditures in Vermont have increased faster than any other state in the U.S.

Or, as UVM economist Art Woolf noted in a recent article in the Burlington Free Press, “Over the last two decades Vermont went from being a low health-care cost state with a small percentage of uninsured to one of the highest spending states.” Everything our government has done to help make healthcare more affordable has backfired in spectacular fashion.

This is not a knock on Kevin Mullin. His contradictions are inherent in the policy he’s tasked with carrying out, and the impossibility of a six-member group of political appointees successfully understanding, much less managing, a massively complicated market.

States without CON laws have lower costs, better outcomes and more access to health care. It’s time to subject our CON laws and the Green Mountain Care Board to a certificate of need process. I think we’ll find we don’t need either of them.

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

4 thoughts on “Roper: Mullin illustrates the trouble with certificate of need laws

  1. Very good article Rob. I’m glad that this CON situation with Copley is being brought to public attention. As you know, I’ve been following the GMCB since it’s beginning, and with many concerns. One of my concerns regards the overall lack of knowledge about hospitals, and esp. hospital budgets. This latest with Copley is just one more step toward Socialized medicine-just like Canada. Feel free to correct me if I’m wrong, and I hoe I am.

  2. Ok, good. I agree. What exactly do we need to do as citizens to get rid of the GMCB and CONs? Who do we contact and where do we demonstrate? Tell us! We would become more involved if we knew in which direction to proceed!

    • I agree where can we protest the injustice of the GMCB. We need to stay focused on health care NOT health insurance. We condemn the insurance companies for making a profit and let the hospitals purchase up private practices and make millions as they set prices. Hospitals in Vermont are reluctant to give the cash price and/or a discount for paying cash for a procedure! Whats up with that.

  3. Very frightening interview. Does Vermont now have a “Death Panel” ? So glad we have left and moved to Arizona. Working as a nurse here has shown me the difference after 40 years working in Vermont. Hopefully some of the panel and legislators will be denied needed care!

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