CON programs primarily aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Interactive Map of State CON Laws Currently, 35 states and Washington, D.C., operate a CON program with wide variation state to state.
Full Answer
Is there a systemic approach to containing health care spending?
Accordingly, a group of Democrat health policy experts recently published “ A Systemic Approach to Containing Health Care Spending, ” in the New England Journal of Medicine (NEJM). Authors included Tom Daschle, Ezekiel Emanuel, M.D., Ph.D, Donald Berwick, M.D. (former CMS administrator), and Josh Sharfstein, M.D. (former deputy FDA commissioner).
Does competitive bidding reduce Medicare spending on medical equipment?
In 2011, such competitive bidding reduced Medicare spending on medical equipment such as wheelchairs by more than 42%. The ACA requires Medicare to expand competitive bidding for equipment, prosthetics, orthotics, and supplies to all regions by 2016.
Is healthcare spending out of control?
Healthcare spending is out of control. That was the reason why Congress passed the Affordable Care Act (ACA), right? Over two years later, we have yet to realize the benefits of healthcare reform, yet spending continues to rise though less than before, outcomes are improving in some areas, but in others still lacking, and what about quality?
How many states have a con program?
Currently, 35 states and Washington, D.C. operate a CON program with wide variation state-to-state. The following 50-state map lists the health care facilities and capital expenditures covered under the CON law for each state as December 2019. Certificate of Need State Laws
Introduction
The United States spends more on health care as a share of the economy than any other country. In 2018, health spending accounted for 17.7 percent of the U.S. gross domestic product (GDP) — nearly twice as much as the average OECD country despite scant evidence of better outcomes.
Part I. Strategies for Controlling Health Spending
Health care spending is determined by prices and utilization and both of those, in turn, reflect a wide range of market features, such as the extent of provider and insurer competition and local practice patterns. Premiums reflect that spending and any insurer markup, which also reflects insurer competition (Exhibit 1).
Part II. Implementing Policy Goals
To understand trends in spending and implement many of the strategies discussed, states need data. States with the proper regulatory authority can compel organizations, particularly payers, to report data.
Conclusion
Given barriers to significant federal action, substantial policy changes to control spending growth are likely to be limited to state policy. States can pursue many different strategies, ranging from efforts to promote competition, reduce prices, or decrease utilization of low-value care to broader strategies that address overall spending.
How much will the US spend on healthcare in 2037?
In fact, this year, national spending on health care will reach $2.8 trillion, or about 18% of total spending on all goods and services. And national health spending is projected to continue to grow faster than the economy, increasing from 18% to about 25% of the gross domestic product (GDP) by 2037. Healthcare reform proposed Accountable Care ...
How does FEHBP align with Medicare?
They recommended that the FEHBP align with Medicare by requiring plans to transition to alternative payment methods, reduce payments to hospitals with high rates of readmissions and hospital-acquired conditions, and adjust payments to hospitals and physicians on the basis of their performance on quality measures.
How long do you have to have a bundle for Medicare?
The bundles will also need to include rehabilitation and postacute care for 90 days after discharge.
What information should be included in a health care plan?
The information should include one price that bundles together all costs associated with a service, individualized estimates of out-of-pocket costs at the point of care, and information on quality of care and volume of patients so that consumers can make informed decisions on the basis of value.
What would the federal government do to promote self regulation?
The federal government would award grants to states to promote this self-regulation model. States could phase in this model, one sector (e.g., hospitals) at a time. To receive grants, states would need to publicly report measures of quality, access, and cost and would receive bonus payments for high performance.
Does Medicare have to do competitive bidding?
The ACA requires Medicare to expand competitive bidding for equipment, prosthetics, orthotics, and supplies to all regions by 2016. The authors recommended expanding this program nationwide and extend competitive bidding to medical devices, laboratory tests, radiologic diagnostic services, and all other commodities.
Can a physician use a safe harbor?
Physicians could use clinical-decision support systems that incorporate these guidelines. Under such a system, the physician could use the safe harbor as an affirmative defense at an early stage in the litigation and could introduce guidelines into evidence to avoid a courtroom battle of the experts.
How many states have CON programs?
The following are state examples of legislative actions impacting CON programs: 35 states currently maintain some form of CON program. Puerto Rico, the US Virgin Islands and the District of Columbia also have CON programs. States retaining CON laws often regulate outpatient facilities and long-term care.
Why are CON programs important?
While the effectiveness of CON programs continues to be a heavily debated topic, many states consider CON programs as one way to control health care costs and increase access to care. Below is a list of both arguments in favor and against CON laws.
What is the assumption of CON regulation?
The basic assumption underlying CON regulation is that excess health care facility capacity results in health care price inflation. Price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used.
What is a CON program?
Health Program. Certificate of Need ( CON) laws are state regulatory mechanisms for establishing or expanding health care facilities and services in a given area. In a state with a CON program, a state health planning agency must approve major capital expenditures for certain health care facilities. CON programs aim to control health care costs by ...
Why do hospitals raise their prices?
Larger institutions generally have larger costs, so hospitals and other health facilities may raise prices in order to pay for new, underused medical services or empty beds. CON programs require a health care facility to seek a health planning agency’s approval based on a set of criteria and community need. Once a health facility has applied ...
Is health care a typical economic product?
Health care cannot be considered as a “typical” economic product. Most health services (like lab tests) are ordered by physicians, not patients. Patients do not shop around as they do for other goods and services.