Paul Levy: Trying to Tilt the Playing Field

The following is excerpted with permission from the blog, "Not Running a Hospital," authored by Paul Levy, former CEO of Beth Israel Deaconess Medical Center in Boston.

As my regular readers know, I oppose protectionist policies against new healthcare providers who might fill a market niche left unfilled or poorly served by incumbent providers.  But, at the other end of the spectrum, let's not give special treatment to those who seek to cherry-pick the system.  One such attempt to do so is currently before the New Hampshire Legislature.

A bill (H.B. 1642, entitled, "Relative to Destination Specialty Hospitals") sponsored by Cancer Treatment Centers of America® (CTCA) — a privately held network of cancer treatment hospitals and outpatient oncology clinics — is designed to exempt the kind of facilities owned by this company from a number of the regulatory requirements in N.H. that are mandatory for hospitals.

First, the bill would exempt these facilities from the certificate-of-need process that hospitals need to pass through.  That process is designed to evaluate whether a new hospital, hospital addition, or major piece of clinical equipment serves a public need versus adding to over-capacity and higher costs.  That a cancer center should be exempt is inconsistent with that public process and its purpose.

Second, the bill would exempt these facilities from paying the state's Medicaid enhancement tax.  In a version of the proverbial patricidal/matricidal criminal asking for the judge's mercy because he is an orphan, the company asks for this exemption because it will refuse to treat Medicaid patients.

Other hospitals in New Hampshire are required to treat Medicaid patients and must pay this tax.  Allowing CTCA to be exempt gives it an inequitable competitive advantage over established institutions who treat all comers.

If CTCA and like companies do, in fact, offer clinical services that provide distinct value to consumers as compared to established hospitals, they should be willing to do so in a face-to-face, level-playing field, environment.  This bill tilts the playing field in ways that will harm the state. (You can read more about the controversy here.)

More Articles by Paul Levy:

Paul Levy: Water Interests in Hospitals: Spraying Infections?
Paul Levy: End-of-life Conversations, as Seen By the Intensivist
Paul Levy: Good Diagnosis, Zeke. Why No Cure?

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