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Richard Brockman

The need to control healthcare costs is an ongoing issue and one that every state works diligently to balance with quality patient care. To help facilitate this need, many U.S. states, including Alabama, are governed by Certificate of Need (CON) laws, which are designed to help control healthcare costs by regulating supply and by requiring advance approval by state agencies for most hospital expansions and major equipment purchases.

"In Alabama, we have measured healthcare because of the CON process," said Birmingham attorney Richard Brockman of the law firm of Johnston, Barton, Proctor and Powell LLP. "CON has been a mandatory program in our state since 1972. When used properly, it ensures that the right amount of healthcare services are used in local communities and that licensed providers provide services correctly. Those states without CON end up with a lot of empty hospital beds and services that are not being provided."

Gary Griffin of Gary Griffin & Associates in Gadsden, agrees that the CON process is needed. He said that hospitals in Alabama are greatly under capitalized which limits their ability to compete with other states. "CON helps non-profit and government hospitals in the state the most," he said. "CON laws can seem like an onerous, complex monster at times, but it's amazing how many unneeded healthcare projects it keeps at bay."

Brockman pointed out that CON is a notice process that begins when a healthcare facility wants to:

o Establish a new facility or service in the community;

o Make capital expenditures over $4 million;

o Purchase medical equipment over $2 million;

o Increase operating expenses more than $800,000; or

o Add beds to a facility or change existing beds to another category (i.e., changing an acute care bed to a psychiatric bed).

To begin the process, the facility files a Notice of Intent for its project then, 30 days later, applies for the CON. In the application, the facility must address issues of access, cost, and financial feasibility. "They also have to outline any detrimental effect their project might have on other healthcare projects in their area. That's to help avoid a dilution in the quality of healthcare in the area or a rise in healthcare costs," Brockman said.

After the application is processed and deemed to be complete, a letter of notice is run in the local newspaper, and interested parties have 45 days to contest the case, which would result in a public hearing. The case is then set for review by the nine-member CON Review Board, which is made up of both healthcare consumers and providers who are appointed by the governor. The board studies the case files then listens to both the applicants and any opponents before they vote on the case.

Birmingham neurologist Dr. Swaid N. Swaid is the chairman of Alabama's CON Review Board, and he said the board's function is to eliminate duplication of healthcare services in the state to avoid excess capacity. "My philosophy is that we will consider any project that is consistent with the State Health Plan if it is truly needed for the healthcare of the citizens of Alabama. We also have to understand the economic implications of the project to make sure it will not devastate an existing project," he said. "Our primary consideration is whether the project will be advantageous for healthcare in the state of Alabama. Beyond that, nothing is of great significance."

From his perspective as a physician, Swaid agrees that the CON process is good for the state, and he feels the process is even better now than it has been in the past in Alabama. "Our board runs independently, and I want to compliment the members for their openness and fairness over the past three years," he said. "In the past, the board was perceived to be politically motivated, and doctors felt the board tilted the process in favor of hospitals. We've tried to balance that, and I think if we can keep that objective in place, the CON will remain a good process. If everybody gets along, everything works better for everyone involved."

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