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FOR IMMEDIATE RELEASE |
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State
Rep. Phyllis Mundy |
  
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House Insurance Committee hears testimony on Mundy certificate-of-need bill
HARRISBURG, Sept. 4 – Legislation authored by state Rep. Phyllis Mundy, D-Luzerne, that would hold down health-care costs by reining in what she called a "technological arms race" in Pennsylvania health care, was the focus of a recent House Insurance Committee hearing.
Mundy's bill (H.B. 305) would curtail Pennsylvania's costly technological health-care services by seeking to reinstate the Certificate of Need program, which expired in 1996. The law required hospitals and non-hospital health-care facilities to justify the purchase of expensive technology or specialized services and to prove they would provide the needed services to the communities in which they function.
She said without a certificate of need program, expensive high-tech equipment, physician-owned surgical facilities and other medical technology often is overused and results in the duplication of services.
"There is a saying, ‘If you build it, they will come.’ But at what cost?" Mundy said. "The number of MRI units and ambulatory surgical facilities owned by physicians in Pennsylvania is growing by leaps and bounds, impacting the efficiency, quality and cost of health care."
A study performed by the Legislative Budget and Finance Committee in 2005 reported that since the sunset of the CON program, health-care facilities established 21 diagnostic cardiac catheterization programs, 31 new cardiac catheterization programs and 23 open-heart surgery programs.
The Pennsylvania Department of Health reports that the number of physician-owned ambulatory surgical facilities has increased from 44 to over 230 since the expiration of CON. A 2003 survey by the medical journal Health Affairs found the number of physician-owned magnetic resonance imaging units in Pennsylvania increased 47 percent from 1999 to 2001. And the Pennsylvania Health Care Cost Containment Council reports that the number of MRI scans increased from 9.3 million to 13.5 million during that same time period.
"On average, MRI units cost $2 million to buy and $800,000 per year to run," Mundy said. "When a physician buys one of these expensive pieces of equipment for his or her own office, as many are doing now, there is likely to be pressure to use it. Self-referring physicians order two to eight times as many scans as other doctors."
Mundy’s legislation would not only reestablish the CON program, but also make several additions and changes. The bill would:
- Create local review committees to review certificate of need applications and make recommendations to the Department of Health. The local review committees would be made up of local or regional groups of consumers, businesses, labor groups, health-care providers or other affected interests.
- Require applicants to submit a data-based cost analysis showing that there is not a less costly, more appropriate or effective alternative of providing the proposed service and that the proposed service would not have an inappropriate adverse impact on health-care expenditures.
- Require the Pennsylvania Health Care Cost Containment Council to assist the Department of Health in the application review process.
- Create a "look back" provision to require the Department of Health to monitor the quality of a facility one year after a certificate has been issued by requesting data from PHC4, including mortality rates and the number of procedures performed.
- Ban physicians from referring patients to any facility in which they have a financial interest -- for example, scanning facilities. Self-referring physicians order two to eight times as many scans as other doctors, according to HealthHelp, a radiologist management company.
"Having a certificate of need process is a common-sense way to save on health-care costs," Mundy said. "Currently, more than 30 states use this process or other regulatory measures to review health facilities, or services or both. It’s time Pennsylvania rejoined them."
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