State hospital regulation lapses

Legislators failed to reenact a law on health care competition. A bureaucratic wrangle has given Pennsylvania's 218 hospitals and health clinics an early, and in many cases unwanted, Christmas present -- the ability to compete for new business without government regulation. Last week, the state legislature failed to reauthorize the state's so-called "certificate of need" law that gives the government the power to regulate competition among hospitals seeking to construct new buildings and expand services. The law is set to expire December 18. Officials at the Pennsylvania Department of Health, which had overseen the law, said the sudden deregulation caught them "by surprise." "This is a totally new situation, one that I don't think anybody expected," said Bruce Reimer, a spokesperson for the department. "It's open season now for hospitals to do whatever they want to do." Since the law's inception in 1980, the legislature has had to vote every three years either to extend it or allow it to expire. Legislators had supported its continuation -- until this year. The Pennsylvania House of Representatives passed the extension last week, and sent the law to the state Senate for a vote. The Senate then amended the bill to allow exemptions for open-heart surgery programs, but for some reason -- and senators differ on the explanation -- didn't get the bill back to the House before it adjourned November 26, guaranteeing the law would not be reauthorized this year. Reimer added that while "there were problems" with the law, the department had hoped to get the program extended for at least one more year to evaluate the best ways to proceed. Because the opposition to the law's extension in the Senate muddied the exact reason for the delay, no one can predict how the body will vote when it reconvenes in January, a state senator told The Daily Pennsylvanian yesterday. But officials at the Hospital of the University of Pennsylvania maintained that they were not afraid of increased competition from other health-service providers. "We feel confident that we can compete, based on quality, with any programs established in other hospitals as a result of this new situation," said HUP's Director of Government Relations Mike Nardone. Nardone added that while deregulation had created a "window of opportunity" to build or add services, he doubted that hospitals would "be overly eager to jump into new programs." "[Hospitals would] run the risk of the legislature reauthorizing the law when it reconvenes on January 27," he said. "Doing so would halt the construction in the middle." Reimer explained that the law had been designed to prevent the duplication of health services in the same geographical area and keep hospitals from raising health-care costs to pay for unnecessary new construction or services. The law, for example, has often prevented hospitals from adding lucrative programs like ambulatory services or heart-surgery clinics when such programs existed in other nearby hospitals.