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Code Green

Pennsylvania legislators eye return to reviews as hospitals build

| Friday, Dec. 23, 2011, 12:59 p.m.

Pennsylvania should bring back a review process for hospital spending on construction and medical equipment, some state lawmakers said on Thursday in response to a Tribune-Review investigation.

Sen. Jim Ferlo, D-Highland Park, plans to introduce legislation that would reinstate the certificate of need, or CON, law requiring hospitals and doctors to justify whether such medical expenditures are necessary.

"We need the Legislature, the public sector and consumers to come back into this picture," Ferlo said. "We're paying for all of this, and we should have more say-so."

Leaders of both parties said they would work with Ferlo to restore the CON law, which expired in 1996.

"There's no question that you could make a direct correlation between the accelerating rise in health care costs to the removal of certificate of need," said Senate Minority Leader Jay Costa, D-Forest Hills.

Hospitals nationwide borrowed $144 million since 2008 for buildings, equipment and refinancing, the Trib reported this week in the two-day installment of "Code Green: Bleeding Dollars," a yearlong series on health care costs . Pennsylvania is one of 14 states that do not oversee medical spending, and it's among the top 10 in borrowing for hospital construction in the past four years, the newspaper's analysis showed.

On Monday, the Trib examined the CON review process for proposed hospitals in North Carolina and Illinois. The newspaper reported that California, which led all states in hospital borrowing, has no CON review and requires hospitals to better withstand earthquakes.

The Trib reported on the brewing hospital feud in Monroeville, where the 156-bed UPMC East is scheduled to open July 2 less than a mile from 218-bed Forbes Regional Hospital.

UPMC officials say their $240 million hospital will feature "hotel-like amenities" and serve unmet demand in the eastern suburbs. Administrators at West Penn Allegheny Health System, which owns Forbes Regional just down Mosside Boulevard, countered that adding excess capacity will drive up costs. Highmark Inc., the state's largest insurer, plans to purchase West Penn Allegheny.

"If we had a CON law in place, I'm sure it could have been a determining factor between the new (UPMC) facility in Monroeville and Forbes," said Sen. Don White, R-Indiana, chairman of the Senate Banking and Insurance Committee. He said he likes Ferlo's idea and would talk with him about pursuing legislation to restore CON review.

White praised the Trib's series for highlighting differences in hospital construction laws here and across the country.

"It gave me a lot of questions; I was very impressed," he said. "Sometimes your world is pretty focused and narrow. ... I didn't realize it was going on all over the country."

Rep. Randy Vulakovich, R-Shaler, said he would consider restoring the CON law after seeing an aerial photograph showing the proximity of UPMC East and Forbes Regional on the Trib's Sunday front page.

"I'm looking at it thinking, 'Wow, here we go,'" Vulakovich said. "You have one hospital by one entity, and you have another hospital by another entity -- what are we doing with two hospitals like that side by side?"

Ferlo said government oversight is needed to help ensure that rival nonprofits do not drive up health care costs across Western Pennsylvania by duplicating services. He credited the Trib series for bringing attention to the issue.

To read the Trib's "Code Green: Bleeding Dollars" series on waste in national health care costs, click here .

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