BY NATHAN GRANGER | LINK nky REPORTER

topic that has divided some in the Northern Kentucky medical community took center stage at a pair of Erlanger City Council meetings over the last month, with those for and against it both saying they’re looking out for people in rural, low-income communities.favor of maintaining certificate of need argue that it protects services for patients who rely on Medicare or are uninsured.

One council member called the requirement archaic.

A certificate of need is required under Kentucky law for healthcare providers to open up a new facility, acquire major medical equipment, make substantial changes to a facility or project, or “alter a geographical area or alter a specific location which has been designated on a certificate of need or license,” according to the Kentucky Cabinet of Health and Family Services.

The debate over Kentucky’s requirement for a certificate of need brought backers and detractors of the law to the April 4 council meeting.

In Northern Kentucky, one of the biggest proponents of certificate of need is St. Elizabeth Healthcare, which merged with St. Luke Hospital in the early 2000s. With at least eight hospital locations across Northern Kentucky, St. Elizabeth is one of the largest healthcare institutions in the region and inevitably becomes the focus of certificate of need discussions as opponents of the policy view institutions like St. Elizabeth as an example of the market dominance they aim to upend. Those in

Most of the speakers who criticized certificate of need that night added a caveat that they weren’t opposed to St. Elizabeth as an organization, just the policy. Some even stated that they were patients or former patients at St. Elizabeth.

“What I’m looking to do is reduce the amount of services that are regulated by the certificate of need,” Rep. Marianne Proctor (R-Union), told LINK nky.

Proctor sponsored legislation in this year’s session that would allow any healthcare provider to operate in Boone, Campbell, and Kenton counties without first requiring a certificate of need.

Among supporters of the requirement, which Erlanger City Council voted 6-3 to reform after a two-hour discussion that April 4 night, was St. Elizabeth CEO Garren Colvin.

“Communities like ours greatly depend on access to safety net facilities like St. Elizabeth,” he told council members. “Certificate of need ensures that we’re able to provide these comprehensive, critical, top-quality services to the entire community.”

“I hope that if it passes that it will carry over to the whole state because there are some rural areas, I feel like, that lack services,” said Council Member Jennifer Jasper-Lucas, who works as a nurse. “I think that removing the certificate of need process would allow, obviously, providers to come into those areas, too.”

City resolutions like the one passed April 4 have little concrete power – they’re not binding pieces of legislation like statutes –but the way in which cities resolve to treat an issue sets the tone for future discussions at the state level.

If certificate of need laws are abolished by the state legislature, it would be much easier for other healthcare providers, such as Cincinnati Children’s Hospital and Christ Hospital, to expand facilities throughout the region. Many of these institutions already operate in Northern Kentucky but are limited in their ability to proliferate due to certificate of need regulations.

Certificate of need proponents claim that medical markets can become oversaturated in their absence. They argue that this lack of state oversight can lead to higher prices, redundant services and the crowding out of essential services in favor of more profitable but less necessary services. They also argue that over-saturation can make it harder for people who rely on Medicare, Medicaid and other subsidized health care coverage to get access to affordable care, as medical providers tend not to turn profits from government coverage plans.

Opponents say that certificate of need adds an extra layer of bureaucracy to an already administratively top-heavy sector, leading to inefficiency. They also say that such laws allow regionally dominant health care providers to extend monopoly power over particular areas by giving them the means to suppress economic competition, which, in

Erlanger Mayor Jessica Fette speaks during a city council meeting on April 4. Photo by Joe Simon | LINK

Continued from page 3 turn, leads to a decline of healthcare quality and price fixing for services.

Both sides contend that their policy solutions would increase accessibility for rural, low-income areas that may not have well-developed medical infrastructure.

The conflict in Erlanger began on March 21 when Proctor, who occupies the seat for the state’s 60th district, made an unexpected visit to Erlanger’s council chambers. Her visit did not appear on the city’s published meeting agenda, but council allowed her to speak anyway.

Elranger Mayor Jessica Fette gave the city’s reasoning for allowing both sides of the issue to speak in front of the council at the meeting on April 4.

“We make sure that we give our legislators the opportunity to have time in front of our council members,” Fette said. “We want to hear from them, and we want them to be able to hear from us.”

She extended this courtesy to other institutions as well, including hospitals that are in favor of certificate of need regulation.

The bill Proctor presented to reform certificate of need floundered in the legislative session, never making it to committee. She promised to reintroduce similar legislation during the next session and even hoped to extend the repeal to the state as a whole.

“We need some choices in health care,” Proctor said. “A lot of people were disappointed with the quality they received.” People were particularly concerned, she said, with wait times and a lack of due diligence.

“They felt like it was taking too long to be seen,” she said, “or that they weren’t adequately being addressed. I believe that when people have choices, then informed people can make those decisions, and we don’t have that in Northern Kentucky.”

Medical providers must apply for a certificate of need if they want to provide services flagged by the health cabinet. There are 21 medical services in Kentucky that require a certificate of need, including inpatient surgery centers, long-term elder care, imaging services (e.g. MRIs and PET scans) as well as residential psychiatric care.

A cabinet judge assesses if the provider meets the state’s criteria for need before issuing or denying a certificate. Other healthcare providers can challenge the issuance of a certificate at a public hearing if they feel that granting it to a new provider is unnecessary or would lead to adverse effects in the community. The judge then weighs both sides and makes a determination from there.

Certificate of need laws have been around for over half a century. The first example of such a law in the United States was passed in New York in 1964. Ten years later, Congress with the support of the Nixon Administration passed the National Health Planning and Resources Development Act, which set the standards for certification around the country.

Many states began passing similar laws following Congress’s action, but over time the policy lost support at the federal level, ending with the repeal of federal certificate of need regulations in 1986. There are currently no federal regulations relating to certificates of need, and certification policies vary from state to state.

Thirty-five states currently have certificate of need laws on the books. Many states, however, have drastically reduced their requirements over the years: Both Ohio and Indiana, for example, only require certifi- cate of need issuance for long-term eldercare facilities.

The Kentucky Hospital Association is in favor of maintaining certificate of need in the state, and argues that many healthcare facilities would close without its protection –particularly rural hospitals. Those closures would mean patients would have to travel farther for healthcare.

“If Kentucky were to mirror the no-CON state statistics, the state would lose 12 hospitals, and Kentuckians (and their payors) would pay $600 million more per year for inpatient services, with Medicaid alone picking up $125 million more,” the report said.

Proctor concluded her statements at the March 21 meeting by asking the Erlanger council to make a resolution to support the reform of certificate of need at the state level. In doing so, she referenced a recent resolution from Fort Wright, which expressed opposition for the change.

Staff members and representatives from St. Elizabeth Healthcare also attended the March 21 meeting but did not speak.

Council members appeared to be in support of such a resolution at the March meeting.

Fette held a straw poll after the statements to see which council members would be in support of reforming the requirement. Every council member present raised their hands.

Both supporters and opponents of certificate of need filled the seats on that Tuesday night, including staff members from St. Elizabeth and other healthcare institutions. St. Elizabeth’s CEO and President Garren Colvin gave a brief history of CON and how it worked, then began arguing for its necessity.

He characterized St. Elizabeth as a “safety net hospital,” which is not an official, legal designation, but refers, instead, to St. Elizabeth’s policy of accepting all patients regardless of their ability to pay.

“In fact, it’s only because of certificate of need processes that St. Elizabeth can be a safety net hospital,” Colvin said. “Without certificate of need, outside operators could come into our communities and cherry pick the most profitable services to offer.” Most of the patients St. Elizabeth cares for are Medicare and Medicaid patients, he said, adding that the percentage of their client base on Medicaid matched the proportion of the region’s population on Medicaid, which he claimed fluctuates between 22% and 23%.

Data provided by the U.S. Census Bureau showed it to be closer to 16% in 2021.

He said that Medicare and Medicaid does not usually cover the cost of healthcare, meaning that many of the services at their facilities are not profitable. According to survey data from the American Hospital

Association, hospitals received an average of 84 cents from Medicare for every dollar spent caring for Medicare patients in 2020. Likewise, they received 88 cents from Medicaid when caring for Medicaid patients in 2020.

He went on to say that leaving healthcare entirely up to the free market would disincentivize providers from setting up in rural communities, where it would be difficult to turn a profit. Nonprofit, mission-based organizations like St. Elizabeth provided an equitable alternative, he argued, as they could provide services even in the absence of profitability.

After some clarifying questions from council members, the public was allowed to speak. Nineteen people spoke, with opinions being about evenly split on the issue. Statements from both camps elicited cheers and applause from audience members.

Several staff members and administrators from St. Elizabeth spoke in favor of certificates of need, often drawing attention to St. Elizabeth’s work with nonprofit organizations and its status as one of the region’s largest employers.

Leaders from other healthcare providers spoke in favor of the requirement as well.

Dan Thomas, the COO of Sun Behavioral Health, an Erlanger psychiatric hospital, said that the law is especially important for his facility because about 70% of their patients are either on Medicaid or are uninsured.

“CON is a protection device,” Thomas said.

John Muller, the COO of Villaspring, an Erlanger skilled-nursing facility, said that certificates of need offered predictability and accessibility, enabling people who are older or less mobile to stay close to their families.

The detractors were numerous, too.

Several of the speakers against certificates of need regaled the audience with bad experiences they’d had at St. Elizabeth facilities.

Carol Dwyer from Florence, said that her mother was the victim of neglect on the part of St. Elizabeth when a wound on her mother’s leg led to a case of septic shock, which was only resolved when she took her mother to another provider.

Bill Woodside said that he spent nearly five hours at a St. Elizabeth emergency room. He even called on one of the council members, Tom Cahill, who works for St. Eliza- beth’s sleep medicine department, to recuse himself from voting on the resolution. Cahill ended up casting a vote opposing the resolution.

In addition, Greg Proctor, a representative from the Kentucky branch of Americans for Prosperity, a fiscally conservative thinktank funded by Charles Koch, compared certificate of need in Kentucky to “permission slips from a government board that hometown healthcare providers must receive if they wish to open new health care services or expand an existing service.”

Jerry Gearding, a Republican Kentucky House of Representatives candidate who lost the 67th district to Democrat Rachel Roberts in the last election, said that revoking certificate of need laws would grant Northern Kentucky residents a wider degree of choice in finding healthcare.

“Please give Northern Kentucky families a choice and help support this resolution,”

Gearding said, “so Rep. Proctor can get this passed next session.”

Boone County Commissioner Chet Hand and state Rep. Steve Doan, Erlanger resident and co-sponsor of Proctor’s bill at this year’s legislative session, also spoke in favor of revoking certificates of need.

Doan thanked both St. Elizabeth and Erlanger council in his statement.

“I thank this body [Erlanger City Council] for considering this resolution and for sending a message to all of us down in Frankfort,” Doan said.

When public comments concluded and the time came for the council to vote on the resolution, City Attorney Jack Gatlin reiterated that the resolution would only assert that Erlanger was in favor of investigating current certificate of need laws with an eye to reform rather than outright repeal.

Council Member Vicki Kyle reasserted the sentiment.

“CON needs to be modernized and updated by new regulations,” Kyle said, “which will improve health care, which will give our constituents a choice. And also while they’re doing that, hopefully, this will help promote helping the Medicaid and Medicare patients.”

Council members Diane Niceley, Tyson Hermes, Vicki Kyle, Renee Wilson, Rebecca Reckers and Jennifer Jasper-Lucas eventually voted in favor of the resolution.

Council members Tom Cahill, Don Skidmore and Renee Skidmore, meanwhile, cast opposing votes.

The next Erlanger City Council meeting will take place on April 18 at 7 p.m. at the Erlanger city building.