The battle to preserve the state’s certificate-of-need laws is about to get personal.
A newly formed political organization, connected with the North Carolina Hospital Association, seems poised to target elected officials who oppose CON laws, which require a state bureaucracy to approve new free-standing ambulatory surgery centers or the purchase of high-end medical equipment.
Partners for Innovation in Health Care Inc. filed incorporation papers with the North Carolina Secretary of State’s office April 26. It is a 501(c)4 nonprofit organization.
The new organization plans to be a major player in state politics. Its website states a goal to raise startup funds of $2.5 million and raise $2 million annually.
The group is shrouded in secrecy, and the handful of people listed on official documents as contacts would not discuss the organization’s strategies with Carolina Journal.
But the website does suggest elected officials and political candidates will be on the group’s radar.
“Donations to PIHC will be confidential, reported only to the IRS and donations do not meet maximum limits such as the state $5,100 cap on state PACs,” the website says. “This will provide us more flexibility when we need special engagements in legislative policy fights as well as during campaigns for the state legislature.”
A four-page brochure on the group’s website lists its address as 2400 Weston Parkway in Cary. That is the headquarters of the North Carolina Hospital Association. The articles of incorporation at the Secretary of State’s office list Raleigh attorney Steven B. Long as its registered agent.
When asked Thursday about the link between the hospital association and the politically motivated independent expenditure organization, Long said: “I’m not authorized to speak about that entity.”
The Hospital Association did not respond to questions about its role in creation and operation of the organization.
The website lists Joyce Kohn at 5 West Hargett Street, Raleigh, as the person to whom checks should be made payable.
“I’m actually not an authorized spokesperson for this,” Kohn said when contacted Thursday, stating that she is simply a member of support staff.
Both Long and Kohn said they would notify the individual or individuals authorized to speak for the 501(c)4 organization to respond to a reporter’s questions. They would not say who that was, and no response was received.
CON laws have been under assault for the past several years in the General Assembly, as opponents say they limit competition, raise costs, and restrict access to medical services, particularly in rural areas. The hospital association says that rigorous approval system is vital to protect hospitals’ thin financial profitability, and to continue to provide charity care.
Critics say the monopolistic system is a barrier to entry in the health-care field that protects incumbent providers, drives up costs, limits options, and reduces quality.
The website says PIHC would be “committed to promoting policies that are realistic and achievable regarding Medicaid, certificate of need, tax reform, and behavioral health.”
That mirrors the agenda of the hospital association, which has been running radio advertisements on certificate of need and behavioral health issues since April.
“We tend to promote the things that are legislative priorities for our organization, and certainly behavioral health is one of our legislative priorities this year,” said NCHA spokeswoman Julie Henry.
“We do have one that’s running currently on certificate of need, mostly educational. It does ask elected officials to protect certificate of need,” Henry said. “We have done that in the past.”
The hospital association has an annual contract with the North Carolina News Network to run $18,000 in radio advertisements monthly. Most of them are educational, Henry said. She didn’t know what percentage of April’s radio buy was devoted to certificate of need. That would be in the association’s monthly report submitted to the Secretary of State’s office.
Only one of the nine bills reducing or eliminating CON restrictions met the General Assembly’s April 27 crossover deadline. But sponsors say the others could return, with momentum growing to expand access to medical services at lower cost.
Sens. Ralph Hise, R-Mitchell, and Trudy Wade, R-Guilford, are primary sponsors of Senate Bill 324 repealing the certificate-of-need system entirely. Rep. Beverly Boswell, R-Dare, is the primary sponsor of companion legislation, House Bill 640. Those bills didn’t make crossover.
“At the time for crossover we were not completed with those discussions yet,” he said. “I am still very confident that you will see significant CON reform before the end of session.”
Crossover is the deadline imposed by legislative leaders that requires a bill to pass the House or the Senate to remain alive in the current two-year session. Spending and some other types of bills are exempted from the crossover mandate.
Hise said he may not have enough support to end CON laws, but he’s optimistic the conversation is headed that way. A phased-in, total repeal is likely at some point.
Matt Mitchell is senior research fellow and director of the Project for the Study of American Capitalism at the Mercatus Center at George Mason University. He thinks North Carolina would be better served by repealing all CON laws instead of continuing a piecemeal strategy.
He said CON is bad for consumers. Federal antitrust officials in the Department of Justice and Federal Trade Commission have said certificate-of-need laws serve no purpose other than to protect current providers.
Mitchell said research shows states with CON laws have 15 percent fewer ambulatory surgery centers and 30 percent fewer hospitals than states without them. They have fewer hospital beds and fewer services per capita. There’s less rural care in CON states, and consumers must drive farther to access care. Per-unit and per capita costs are higher in CON states.