As CON laws disappear, quality becomes more important in decisions
This may bring more work for quality managers
A growing number of states have begun to lift restrictions on what services hospitals can offer. It would be a good idea to pay close attention to what’s going on in this arena in your state because quality issues come into play in all categories and stages of certificate-of-need (CON) deregulation. Without a doubt, your job will be affected by what’s going on now and down the road. An important point: If your hospital is in a state where deregulation is allowing markets to open up, don’t let the heat of competition force you to lower your standards or take short cuts in your accreditation and credentialing processes.
Under state CON laws, a hospital must demonstrate that its community has a special need for a given service for the hospital to be allowed to expand into new services and technologies such as magnetic resonance imaging, ambulatory surgery, or cardiac care. (See related story, p. 202.)
Hospital Peer Review asked Mary Yost, RN, spokeswoman for the Ohio Hospital Association in Columbus, how CON changes affect hospital quality and the jobs of quality professionals. "In many cases," she says, "where CON regulations are eased, they are being replaced by new quality standards." The legislature voted to deregulate CON for all facilities in her state (except for long-term care) in 1995. The lawmakers set up a gradual deregulation schedule, and in the place of CON, created a new system for setting up quality standards and public reporting on how hospitals meet those standards.
"So in one piece of legislation, they directly tied the two together," says Yost. "The move away from CON pointed us in the direction of new quality standards. The thinking at the time was that the move was in some ways an acknowledgement that CON was not accomplishing what it was intended to accomplish. What lawmakers were recognizing was that the state can play a role in quality oversight, but not through CON."
But the new state quality measures are coming slowly, she says. "The legislature has spoken about the direction it wants us to move in, but putting it into effect is another story. It can’t be done overnight." What the state of Ohio has accomplished to date is to create the rules that spell out what the quality standards are. Next, the state will have to determine what kinds of data it will ask hospitals to provide to measure compliance with the standards.
"That’s complex stuff," says Yost. "Once those systems are up and running, there will be more work for quality managers because they’ll have to make sure they’re doing everything they need to do to comply with the new law. Today, no. We’re not there yet."
We look at things differently now’
Patti Higginbotham, RN, CPHQ, director of quality improvement at Arkansas Children’s Hospital in Little Rock, says her role has changed somewhat over the past few years since CON deregulation in Arkansas. "We look at things differently now," she says. "Expanding our services has caused us to question how we should evaluate quality what indicators we should look at and measure and what the priorities are."
With so much going on, issues of priority are especially difficult, she says. "It’s hard to know what’s more important than something else when they’re all important. How do you determine what activities and measures and improvements deserve more of your time?"
Arkansas Children’s Hospital applied for and got CON approval to increase its neonatal bed space. "We have to ask ourselves, What was the goal in asking for that expanded service? Why was that important?’" says Higginbotham. As a part of planning for new programs and services, the quality department has to look at why the facility wants to do what it’s doing. It has to figure out what kinds of quality measures it needs for those new services to show that the facility is achieving goals in terms of actual patient care and cost.
"We have a long way to go in learning how to evaluate new business plans," she says. "We’re good at tracking them financially, but we have to stop and consider why we’re taking a certain road. Are we going to reduce hospitalizations for a certain group? Are we going to improve clinical outcomes over time? Are we going to increase patient satisfaction? Reduce waste? It’s easy to get tied up in the improvement activities how we’re going to measure and report but you have to spend more time on looking at the why’s."
David B. Nash, MD, MBA, associate dean and director for health policy at Thomas Jefferson University in Philadelphia, agrees that there may be more work for quality managers when CON laws are lifted, but quality professionals also are involved prior to that point, when hospitals apply for the addition of new procedures. "When a hospital applies to the state for a new building for a procedure," he says, "it has to submit historical information on that procedure’s quality. The CEO or director of planning typically comes to the quality managers or directors for that information, and they have to supply specific data about how many cases the hospital has done, what the complications have been, the success rate, and so on."
Credentialing and tasks regarding job classifications also are affected by CON laws on the books. For example, if your facility gets approval to begin to provide maternity services, you will have to make sure you have specially credentialed nurse managers with a specified number of years of experience. Those staffing requirements make credentialing a big part of the quality standards.
Ted Ackroyd, director of Harrisburg, PA-area data analysis firm QuadraMedi Corporation, says if a facility’s CON application is denied, "it may well be that the individuals who were going to provide that service will either continue doing what they were doing previously or be transferred to some other operation within the system. Certain narrowly trained individuals may lose their job due to CON development, but that would be more the exception than the rule."
For QI to go smoothly, quality planning must be done well. Barbara Niedz, PhD, RN, director of quality management at St. Joseph’s Hospital and Medical Center in Paterson, NJ, explains that CON laws make quality planning one of the three facets of quality at her facility, the other two being quality improvement and quality control. Planning, she says, involves making sure you have identified clearly who your customers are and what their needs are, then being sure you’ve designed services and processes to deliver those services to meet those customers’ needs.
"For example," says Niedz, "we made a CON application for pediatric cardiology two years ago, and it was approved. St. Joseph’s went through extraordinary lengths to collect data for that application. Of course there was no historical data, because pediatric cardiology hadn’t been one of our services." The data that had to be collected and presented had more to do with how many pediatric cardiology surgeries occurred over past years in the state. The organization had to determine how many patients needed the service in the state historically and where they went for the services. "That’s the kind of quality data that goes into quality planning documents," she explains.
Since St. Joseph’s implemented its pediatric cardiology program, the quality department has had to institute measures to monitor the quality of that new service. "Now it becomes a part of quality improvement and quality control," says Niedz. "If a good job has been done in quality planning, the job for the quality improvement folks is made easier — your outcomes are good from the outset, and all you’re doing is monitoring."
Thirty-seven states still require approval of specialized services under CON laws, but restrictions among those states are beginning to loosen. (See map and grid showing which states retain CON regulations and which are in transition, pp. 198, 200.) Efforts to eliminate the review process altogether failed this year in several states, including Georgia and Washington. New York and Connecticut maintain their CON laws, but have taken steps recently to streamline them. (See related articles on the status of CON regulations in Pennsylvania, Vermont, Ohio, and New Jersey, pp. 202-206.)
Opponents of CON laws say, "Let’s level the playing field and keep markets competitive." They view the approval process as cumbersome and costly. Managed care has taken over the job of squeezing out costs and has made any cost-effectiveness motives on the parts of lawmakers obsolete. The regulations, they say, impede their efforts to compete aggressively for patients and managed care contracts. Lou Marturana, a consultant with the Health Care Quality Institute in Edison, NJ, says health care services seem to be market-driven, but when CON is lifted, the demand for services often escalates. "Let’s remember that everyone went to Texas for cardiac services 10 years ago," he says.
The new freedoms associated with deregulation have profit potential and give hospitals greater flexibility to compete. Says one opponent of CON who wished to remain anonymous, "General hospitals have become dinosaurs big bodies, small brains." Another opponent, who also asked to remain anonymous, asks how the government expects hospitals to be more competitive while denying them the tools required for competition. The barrier to an open market, he says, often has little to do with quality or cost, but really is aimed at protecting existing providers from competition. Powerful for-profit hospital systems such as Nashville, TN-based Columbia/HCA, for example, have been lobbying for years to rescind CON laws in states that affect their facilities.
CONs protect more than status quo
On the other hand, some want the CON laws to stay on the books and oppose "the selfish skimming off of profitable services" by boutique facilities. Some observers say the proliferation of facilities that are focused on well-insured patients with particular conditions amounts to "medical gentrification," and that such a situation could destroy the financial and medical underpinnings of full-service hospitals.
Observes a CON proponent, who wishes to remain anonymous, "My community needs another hospital about as much as it needs a multimillion-dollar macarena dance hall." Easing of CON regulations lowers quality, they these deregulation opponents contend, as well as draining patients and money from the larger hospitals that need that revenue in order to continue to fund training and research.
Political interests, driven by economic forces, exert a powerful influence on the sunsetting and rescinding of CON laws. State CON laws came to the fore about 20 years ago. They were designed to regulate unwarranted growth in the medical industry and hold down unnecessary health care costs. State lawmakers were trying to hold down costs by imposing restrictions to keep hospitals from offering duplicative services in the same geographic area. The authors of CON laws intended to protect quality care and provide public accountability through regulation of new services and negotiation among competing interests.
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