MAC Messages Number 87:
May/June 2001

The size of your healthcare facility and variety of services offered is not an accident or coincidence, neither is it an autonomous decision. Most states and the District of Columbia have a state office/agency that regulates the expansion of the healthcare industry. The designated agency is responsible for projecting healthcare needs and guiding local planning for specific healthcare facilities and services. Part of the regulatory process is the Certificate of Need (CON) program.

During the 1970's, most states and, later, the District enacted CON regulations. State governments worried about the rising healthcare costs, the potential for geographical maldistribution of services and access to services by residents who could not pay. Regulations helped control costs, utilization and distribution of facilities and services in the healthcare market. The CON program was particularly effective is controlling duplication of services and resources. The degree of CON regulation varied from state to state.

Since the mid-1990's, CON regulation has lessened. With pressure from business to allow a market-driven economy, state legislatures have re-shaped and even abolished the CON process. However, some form of CON regulation is still in place in the District, Maryland, North Carolina, Virginia and West Virginia. During the current session of the North Carolina legislature, the debate over CON regulation has raged. The NC Medical Society and the NC Hospital Association have been in conflict over SB 714, a new CON regulation about ambulatory surgery centers and operating rooms. It seems that the NC legislature still strongly supports state government regulation of the growth of healthcare facilities and services.

In North Carolina, the Governor appoints members to the Health Coordinating Council. Members of the Council work with Division of Facility Services to formulate the State Medical Facilities Plan. Opportunity is given for input, when public hearings are held each summer on the draft Plan. For planning purposes, the state is divided into six Health Service Areas. Each area has a filing cycle for CON applications. Forms for new services, equipment and/or facilities must be completed and submitted to the Division of Facilities Services. CON applications can be approved or disapproved. The review of applications is guided by the information in the State Medical Facilities Plan.

The CON process is both a frustration and blessing to hospital planners. When a hospital in our area teamed up with an academic medical center and submitted a CON application to establish a new service, the application was denied. It was felt that the new service was not needed in this Health Service Area. The new service would have drawn patients from the established program at our hospital and utilization of our service would have been under capacity. The other hospital can resubmit the CON application in the future.

Library Services at Cape Fear Valley Health System has provided information to support the CON application procedure. Hospital librarians need to be involved in this process that determines the future development of their organization.

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