HOSPITAL OFFICIALS WELCOME CHANGES IN STATE OVERSIGHT

Local hospital officials say changes in the way a state board oversees hospital expansions are long overdue.

Gov. Mel Carnahan last month signed into a law a bill that removes many projects and facilities from the oversight of the state's Health Facilities Review Committee through the Certificate of Need (CON) program.

Last week, four members of the committee -- chairman Susan Pettit of St. Louis, vice chair John Kimmons of Moberly and members A. James Proffitt of Lake Saint Louis and Jackie Herndon of Sikeston -- resigned. Pettit criticized the bill while it was being debated by legislators, but said she resigned because she didn't have time to implement the new law.

Five members remain on the committee, said Tom Piper, who administers the CON program.

The program was originally designed to help control health care costs by discouraging unnecessary expansions or equipment purchases.

Now, hospital officials say, changes in the health care industry and the advent of managed care are forcing hospitals to keep a closer eye on the bottom line, and the CON program has become outdated.

Previously, a hospital, nursing home or other facility had to seek CON approval for capital expenditures of more than $600,000 or equipment purchases of more than $400,000.

Under the new law, that cap is raised to $1 million in each category.

"Generally, most of the hospitals are happy to see the caps going up with regard to having a little more control over their own improvements," said Patrick Carron, assistant administrator of Perry County Memorial Hospital in Perryville.

Most hospitals have instituted their own cost controls, Carron said.

"We're not going to be making these types of expenditures without a pretty good verification that it's something needed and as a result will produce a decent return," he said. "I think the concern for so long was overspending, and some of the market pressures may be taking care of that for them."

James Wente, administrator of Southeast Missouri Hospital in Cape Girardeau, agreed that the changes in spending caps were needed. "The cost of the new technology is so significant that it was really burdensome to have to go to the state to spend $400,000," he said.

Most recently, the committee came into the spotlight when it reviewed the purchase of a replacement MRI system at St. Francis Medical Center in Cape Girardeau. The committee took no action on the purchase.

No CON reviews are pending for Southeast, St. Francis, Perry County Memorial or Missouri Delta Medical Center in Sikeston.

The new law makes several other changes in the Health Facilities Review Committee's jurisdiction, including:

-- Exempting certain facilities which exclusively serve mentally ill homeless people which are licensed by the Division of Aging, as well as a sanitarium operated by the Church of Christian Science in St. Louis County, and some long term care beds from the CON process.

-- Extends the sunset provision on minimum expenditures on CON projects from 1998 to 1999.

-- Specifies that after July 1, 1999, CON review will be required for existing or new beds in health care facilities or for reallocation of licensed beds for construction projects after July 1, 2000.

-- Requires CON reviews for nursing homes, certain long-term care hospital beds, certain long-term care hospitals and construction of new hospitals after Dec. 31, 2001.

-- Requires criminal background checks for some employees at nursing and medical care facilities.

-- Allows some continuing care retirement communities, skilled nursing facilities and residential care facilities to increase their licensed bed capacities for a two-year period beginning Aug. 28.

Sen. Peter Kinder, R-Cape Girardeau, is a former committee member. He said the Certificate of Need program is "kind of obsolete.

"The health care industry has been reforming itself and taking steps itself to become leaner and more competitive," Kinder said.

He said bills have been introduced in the past to repeal the program, but none have been successful.

Wente and Jeff Krantz, the director of planning for Southeast, disagreed that the CON is no longer needed.

Krantz said the program was developed to create a level playing field among health care facilities, "but it never has done that.

"It turned out primarily to be a mechanism to manipulate hospitals," he said, adding the process by which the program is administered became "more political than practical."

The program creates a level of accountability for hospitals, Krantz said, and without it, "Hospitals would be able to provide services willy-nilly, regardless of whether they're needed or not, whether they're duplicated or not, whether they're affordable or not."