Our view

State should revamp Certificate of Need

April 17, 2014 

S.C. Gov. Nikki Haley

RENEE ITTNER-MCMANUS — File photo

  • In summary

    State needs to streamline Certificate of Need Program, not abolish it.

The state’s highest court has told Gov. Nikki Haley she can’t unilaterally abolish the certificate of need program by vetoing funding for it. We hope that prompts the Legislature to both pay for and revamp the program.

The certificate of need program run by the Department of Health and Environmental Control helps decide whether hospitals and nursing homes get clearance to build new facilities or expand existing programs. After Haley vetoed the nearly $2 million to run the program last year and the state House sustained the veto, DHEC suspended the program.

But the S.C. Supreme Court ruled last week that DHEC must administer the program. So, now, the agency will have to find another way to pay for it until the General Assembly provides new funding.

We think the ruling was appropriate. In their decision, justices pointed out that the governor’s line-item veto power affects only funding, not the existence of a program established by state law.

“The governor’s veto message leaves no doubt that she intended to use her line-item veto power to abolish the entire CON program,” the court wrote. “However, the governor is not empowered to exercise her veto pen in a manner that so broadly affects public policy and attempts to alter legislative intent by reaching back to repeal a permanent law.”

But while we agree that the court was right to curtail Haley’s attempt to abolish the CON program this way, we wouldn’t dispute the fact that it is badly flawed. The decision-making and appeals process to determine who is allowed to build new health care facilities takes far too long and, as Haley claims, impedes free enterprise.

The poster child for that is the snail-like process of deciding which health care group should build a new hospital in Fort Mill. Certificate of need hearings began in 2006, and the question still is not resolved.

Critics such as the governor say the CON program should be abolished and competition in the marketplace should be allowed to determine where hospitals and nursing homes are built. But while we agree that the program should be streamlined, there are good reasons for the state to be involved in deciding where new health facilities should be located and existing programs expanded.

Foremost is the need to prevent unnecessary duplication of buildings and services. In an unbridled free-market system, health-care groups and smaller clinics would focus solely on high-density population areas in a race to skim off low-risk, high-profit patients.

In the end, that could make health care less accessible and more expensive for low-income patients and those outside the more highly populated areas. Yes, the state needs to revamp the CON program so health-care groups don’t have their expansion plans tied up in court for a decade.

But the state shouldn’t get rid of this needed oversight altogether. Fix it, don’t trash it.

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