“We are the regulators!”

by Rob Roper

Kevin Mullin, chairman of the Green Mountain Care Board, appeared on the WDEV radio program Open Mike (10/11/17) to discuss Certificate of Need laws in the wake of a controversy regarding Copley Hospital and their highly successful orthopedic surgery center. Copley is, apparently, generating too much revenue as the result of being highly efficient, performing more surgeries (they have not raised prices), and delivering what is recognized as superior service and outcomes for their patients. Mullen’s comments demonstrate many reasons why the Certificate of Need process is a terrible policy and why the GMCB is incapable of managing the healthcare market.

First, Vermont’s answer to rising healthcare costs is rationing care. They say it isn’t. They’d like us to think it isn’t. But it is. Here’s what Mullin said about why we need a GMCB:

We are the regulators… we have to be the ones who are putting the breaks on utilization. And so that is our role.

“Putting the breaks on utilization.” That means denying care to someone who thinks they need it. Maybe they do, maybe they don’t, but is a six member panel in Montpelier really who we want making that decision? Mullin further reinforces the rationing argument when he says:

The cost of healthcare isn’t just what it costs for a given set of procedures, because you can hold that constant, but if people had more use of those procedures you can still have rising healthcare costs.

It’s not the cost of the procedure that’s driving up costs, it’s the number of patients utilizing the procedure. Sure. 2 x10=20; 3×10=30. But if three people need a procedure the GMCB sees the way to lower costs is to make sure only two get it. Rationing.

Mullin keeps digging this hole:

I do have some gut concerns about whether or not in some respects we’re building a “Field of Dreams”; if you build it they will come. And the reason why I say that is because what we’re not seeing is, because Copley has more orthopedic business, we’re not seeing a decline in orthopedic business elsewhere.

Now, a Certificate of Need (one would hope) is supposed to determine what a community’s healthcare needs are and make sure they are being met, though not exceeded. If you build it and they come, that’s a real world reflection of need. If Copley Hospital is demonstrating that there is a need for more orthopedic surgeries, the GMCB should be looking into expanding their CON, not revoking it as they are now. But, as Mullin confessed, that’s not really the role of the board. Their role is keep people from accessing that care.

Mullin then uses a rationale to justify clamping down on Copley that contradicts the data he cited regarding a lack of decline in other hospitals’ orthopedic output:

What I have concerns about is when hospitals – and they hate it when I use this term but I’m going to repeat it because my gut tells me that in some respects that’s what they’re doing – and that is “poach” on another hospital.

First of all, if other hospitals are not experiencing a decline in services, Copley isn’t “poaching” anything. They are filling an otherwise unmet demand. But even if they were taking customers away from other hospitals, who cares? It’s just a reflection of customers seeking the best service and outcomes – something Mullin says the GMCB wants.

So, you know, nobody here at the Green Mountain Care Board is trying to interfere with someone’s decision about where they should or shouldn’t have their surgery.

Yet, this is exactly what they’re doing. If GMBC tells Copley they can’t perform as many surgeries, the inevitable result is that some patients who want to will not be able to have their procedure done at Copley. Mullin also stated that he does not think hospitals should be able to market their services (In state! More on this later.), which would limit patients’ ability to learn what their best options for care might be.

Mullin tries to give himself a moral “out” here by saying one option Copley has is to perform the same amount of surgeries, but charge less for each one so as not to bring in too much revenue. But, really? If you’re a doctor and are given the choice of performing three surgeries in return for $2000 total, or two surgeries in return for $2000  plus time for dinner with your family and the chance to see your kid’s soccer game, which option are you going to choose?

As mentioned earlier, Mullin does not like hospitals advertising their services to Vermonters. However, he also says,

What I’ve been trying to make very clear to hospitals is, if they’re bringing in business from out of state, that’s economic development.

True enough, and it’s a good thing. But in a command and control system designed to “put the breaks on utilization” locally, what this will do is create an incentive for Vermont hospitals to prioritize out-of-state patients, much like state colleges that get more money for out-of-state students, further limiting access for Vermonters. That’s a bad thing.

Finally, Mullin acknowledges,

            Despite all the best efforts that everyone is making costs continue to rise…

Indeed. A study by the Kaiser Foundation determined that between 1990 and 2014 hospital expenditures in Vermont have increased faster than any other state in the US.

Or, as UVM economist Art Woolf noted in a recent article in the Burlington Free Press, “Over the last two decades Vermont went from being a low health-care cost state with a small percentage of uninsured to one of the highest spending states.” Everything our government has done to help make healthcare more affordable has backfired in spectacular fashion.

This is not a knock on Kevin Mullen. His contradictions are inherent in the policy he’s tasked with carrying out and the impossibility of a six member group of political appointees successfully understanding, much less managing, a massively complicated market. States without CON laws have lower costs, better outcomes, and more access to healthcare. It’s time to subject our CON laws and the Green Mountain Care Board to a Certificate of Need process. I think we’ll find we don’t need either of them.

Rob Roper is president of the Ethan Allen Institute. 

{ 3 comments… read them below or add one }

Keith Stern October 18, 2017 at 8:56 pm

As a candidate for governor here in Vermont I am proposing healthcare reforms that, among other things, addresses the use of competition among healthcare providers to lower costs. The part of my plan that is relevant to this article will be a clearinghouse for patients so they can compare the costs for testing or procedures and have the insurers give a percentage of the savings realized for going to a healthcare provider who charges less than the highest priced provider. In a large part of Vermont it may mean traveling an hour or maybe more to have testing or elective surgery done but if there is enough financial incentive people will do it. Then we will see the providers become more competitive.

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H. Brooke Paige October 19, 2017 at 4:05 pm

What does he mean ?

“We are the regulators… we have to be the ones who are putting the “breaks” on utilization. And so that is our role.”

I might have understood if he had said “putting the brakes on” but “brakes” what the heck ? (breaks – separate or cause to separate into pieces as a result of a blow, shock, or strain.)

Aside from this confusion, I find the “poaching” comment to be rich ! Is it possible that individuals who couldn’t afford their pricy operation at UVM Medical, could afford the less expensive procedure at Copley ?

This whole Certificates of Need (Con) scheme only protects politically connected providers from competition and make them beholden to the politicians who are providing them with regulatory cover – while driving prices skyward !

Reply

ruth bolduc October 20, 2017 at 12:18 am

Kevin Mullen also said that we would not see any results from the experimental, All Payer Waiver , til years down the road, It may or may not help control rising, unsustainable health care costs.

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