Ohio: An extraordinary glut of capacity’

Boutiques’ will affect services offered

Is hospital quality in Ohio suffering now that certificate-of-need (CON) requirements have been downscaled? "It depends on the extent of the service," says Tom Piper, director of the CON program in Missouri’s Department of Health and past president of the American Health Planning Association in Falls Church, VA. "I’d say a community hospital doing open-heart is probably overextending itself."

In the wake of deregulation, Ohio’s Department of Health is developing quality standards and proposing rules for licensing of six types of facilities and nine service categories. The agency is drawing upon accreditation organizations such as the the Joint Commission on Accreditation of Healthcare Organizations in Oakbrook Terrace, IL, existing state licensure programs, and Medicare to develop its quality standards, which will include quality assessment and improvement, contracts, fire safety, records management, the granting of variances, and disclosure requirements and informed consent.

Piper says the state is seeing a strong tendency for physicians to jump ship, form their own groups, and set up independent surgery locations. "They can work bankers’ hours, be very selective about the clientele, and not have much responsibility by way of uncompensated care," he says.

Piper says one study showed that there’s no immediate evidence of any negative effect after deregulation. His reply? "To that I say baloney,’ and Ohio is probably the most acute example." Ohio has been ratcheting down its CON program over a period of three years. "What they have wound up with now is an extraordinary glut of capacity," says Piper. The number of MRIs has gone up by 50%, and the number of psychiatric beds has gone up by 500.

Ohio has nearly finished phasing out its CON laws. Some suburban and rural community hospitals can now offer cardiac bypass surgery, and for-profit systems are building boutique facilities that focus on a niche specialty, offering, for example, only cardiac care or orthopedic surgery. In some Ohio towns with two hospitals, both may offer obstetric care or kidney dialysis. The state discontinued regulating the expansion of kidney dialysis stations beginning in 1995, and since that year 847 stations have opened, according to Gretchen McBeath, a lawyer for the Ohio Hospital Association in Columbus.

Susan Mikolic, quality standards specialist for Lake Hospital Systems in Painesville, OH, says they’re not seeing boutique facilities in her area of the state just yet, "but what we are seeing is an increasing expansion of existing facilities into different programs and areas for which they were unable to obtain a CON formerly. Now there’s nothing stopping them." For example, suburban facilities are now able to offer obstetric and cardiac services to satisfy patients who didn’t want to go into downtown Cleveland. "Until now, facilities close to home were unable to obtain CONs for those services."

A health care building boom is in process in some parts of the state. Mary Yost, RN, a spokes woman for the association, says, "What we’re seeing is not only construction in the areas of ambulatory surgery and outpatient care centers, but also proposals for new hospitals. That was not anticipated."

The new hospitals are not general care facilities, but boutique hospitals that offer specialty services. Yost says Charlotte, NC-based MedCath caused some tremors in Dayton recently when it proposed to build a freestanding heart hospital in that city, but MedCath eventually partnered with existing hospitals instead. (See related article, p. 205.) "The uproar subsided considerably because of the partnership arrangement," says Yost. "But now there’s a new MedCath proposal in Columbus for a freestanding heart hospital." And another proposal for two new hospitals that would be maternity or women’s health centers are in the offing. "People are wondering what those will do to existing hospitals and their ability to provide a full range of services if key services are siphoned away from them," says Yost.

The types of facilities under new licensing rules in Ohio are ambulatory surgical facilities; freestanding dialysis centers, inpatient rehabilitation centers, birthing centers, and radiation therapy centers; and mobile or freestanding diagnostic imaging centers. Among the nine service categories are obstetrics and newborn, open heart procedures, solid organ and bone marrow transplant, radiation therapy, diagnostic imaging, and dialysis.