Legislators take moratorium on serious moratorium talk: Effort to curb health care construction much quieter

April 11, 2005

The push to corral health care construction in Indiana returned to the General Assembly with a lower dose of momentum this year.

Several bills regulating development in one fashion or another made appearances during the session, but no major initiatives will make it out of the Statehouse, according to advocates on both sides of the issue.

Prospects for another push to install a certificate-of-need law or a moratorium next year also appear hazy for now, say legislators who pitched bills this session.

Certificate-of-need laws require any one who wants to build or expand a health care facility to obtain the state's blessing that the project fulfills a need in the market. A moratorium places a temporary halt to construction.

Indiana is one of about a dozen states without a certificate-of-need law. Lawmakers repealed it at the end of 1984, but several businesses lobbied hard for its return during the 2004 session, citing rising health care costs.

Legislators failed to advance bills for the certificate of need or the moratorium last year but formed a study committee over the summer.

This session, state Sen. Gary Dillon, RColumbia City, pitched a bill that called for a certificate-of-need committee. That committee would have reviewed health services and facilities in the state to determine whether a certificate of need should be required.

However, Senate Bill 621 never made it beyond the Committee on Health and Provider Services.

"I think it was pretty much determined and understood early on that a fullblown certificate of need was not going to go anywhere," said Russ Towner, regional director of health care initiatives for Daimler-Chrysler and an advocate of the law.

Sen. Patricia Miller, R-Indianapolis, considered a moratorium as part of Senate Bill 432, but that proposal dealt only with long-term care beds. The chairwoman of the Senate's Health and Provider Services Committee said the moratorium issue has kept a lower profile this year.

"There've been some things kind of picking around the edges of it, but we haven't really seriously considered a moratorium on hospital facilities," Miller said.

In the House of Representatives, Rep. Ralph Foley, R-Martinsville, introduced a bill that originally called for a two-year construction moratorium that covered hospitals, ambulatory outpatient surgery centers and comprehensive care beds.

The most recent version of the bill narrowed that focus considerably. It calls for counties to review health care develop ment plans to determine whether they impair the stability of county hospitals and affect care for the poor, Foley said.

His bill never made it to a full vote in the House before Democrats disrupted the session with a walkout, Foley said. Even so, the bill was no slam dunk.

"I had support on both sides of the aisle and opposition on both sides of the aisle," he said.

Bob Morr saw little sentiment for regulatory solutions to curb health care development. "There was talk, but it was all pro-competition," said the vice president of the Indiana Hospital and Health Association.

In 2004, certificate-of-need backers acted more aggressively. This year, they received polite hearings and little more. Morr pointed to Republican control of both legislative houses and the governor's offices as a big reason.

"The free-market views that are traditionally associated with that party certainly have been prevailing," he said.

Miller disagreed. She saw a change in priorities, not political control, behind the quieter debate. This session, she focused more on long-term care beds because the state could be in line to receive more fed eral money for that area.

While the debate over health care construction may have grown quieter, it didn't end.

Daimler-Chrysler provides health care coverage for 35,000 people-employees, family members and retirees-in Indiana. The carmaker's hospital surgical medical costs, which refer to facility costs and physician fees, run about 20 percent higher in Indiana compared with other states, Towner said.

He points to capital costs as a big reason.

"The problem is getting worse in Indiana," he said, noting that continued cost increases will hurt Daimler-Chrysler's ability to operate here.

Last year, the state Department of Health received 227 plans for new construction or additions involving hospitals, long-term-care locations or ambulatory outpatient surgery centers.

On the other side, health care providers have pointed out that loopholes filled the last certificate-of-need bill and did little to curb construction. They also argue that other factors such as drugs and hospital care are the major reason behind rising costs.

Foley remains undeterred. "I haven't given up on it. However, I will say the forces arrayed against me are formidable."

What happens in the next legislative session may be determined by what unfolds between now and then, Miller said.

"I think it's going to depend on what happens with construction, how much construction we see and what happens in the marketplace," she said.
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