Just last month, Florida approved a law to repeal significant portions of its long-standing certificate of need (CON) program. This law will eliminate the CON requirement for general hospitals, complex medical rehabilitation beds, and tertiary hospital services starting July 1, 2019, removing major regulatory barriers to commencing or expanding many health care services in Florida.
Access the quick-hit strategy guide to services shifting to ASCs
In states that have repealed or reformed CON laws, markets—particularly urban—have historically experienced an influx of ambulatory surgical centers (ASCs) shortly thereafter. For example, Ohio phased out most of its CON laws in 1998, and within three years, 133 new ASCs opened, along with dozens of radiology centers and added hospital beds. This increased competition can pose significant risk to your hospital volumes.
Hospitals or health systems in markets that have repealed CON laws, like Florida, or that have bills working their way through the legislative process, such as North Carolina and Tennessee, must think about expanding their ambulatory presence. Expansion can prevent losing volumes to freestanding providers who are more prepared to appeal to payers and to capture patients. Here's what to consider:
In response to CON law repeals and reforms, it's important that health systems monitor competition for other ambulatory-located services too, such as radiology and post-acute care. This is especially true for freestanding EDs (FSEDs). In Texas, where they have removed CON laws around FSEDs, Independent Freestanding Emergency Centers (IFECs) grew from zero in 2010 to 156 in 2015.
If you are in a market with CON laws or other restrictions on ambulatory site construction, you can prepare for a possible repeal or reform in the future by scenario planning now—and by joining us in monitoring what happens in Florida as limitations are removed.
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