Approach to Overcapacity Janet Olszewski, Director Michigan Department of Community Health (MDCH) October 14, 2010

Certificate of Need Objectives The Certificate of Need (CON) program: Promotes and assures availability and accessibility of quality health services at a reasonable cost and within regional proximity Balances cost, quality and access in its regulations Is not intended to limit competition Does contain unbridled growth and its adverse impact on cost and quality

CON Overview The CON Commission is an 11-member body appointed by the Governor and represents various health care stakeholders. Commissioners serve 3-year terms. The Commission sets standards for covered health facilities and services. MDCH verifies that applicant’s proposed projects meet the applicable standards set by the Commission and other requirements set forth in the Public Health Code. The Director of the MDCH issues the final decision to approve or disapprove a proposed project.

CON in Action In 2006 and again in 2008, the CON Commission revised Review Standards for surgical and computed tomography (CT) services. The commission strengthened both methodologies based on an extensive review by experts in these fields along with consumers, purchasers, payers, etc. Unlike many states where moratoriums are often used to limit growth, Michigan’s CON program continues to allow for new services as long as well documented need can be demonstrated.

CON Impact on CT & Surgical Services * CON CT Standards modified May 2008 * CON Surgical Standards modified January 2006

Bed Need Methodologies Determination of Bed Need Methodologies for: Hospital Beds Nursing Home/Hospital Long Term Care Units Psychiatric Beds and Services Neonatal Intensive Care Services/Beds Matching bed availability with demonstrated need keeps a balance aimed at controlling cost and assuring access

Bed Need Methodologies The methodologies in the standards vary based upon on the nature of the beds Factors used to develop methodologies include: Population rates Age Geographic areas Identified planning areas Current utilization patterns

Hospital Bed Need By Health Service Areas HSA 1 59 Hospitals 13,923 Licensed Beds 61.5% Occupancy Rate 2,807 Excess Beds HSA 2 13 Hospitals 1,653 Licensed Beds 56.2% Occupancy Rate 224 Excess Beds HSA 5 6 Hospitals 1,455 Licensed Beds 68.4% Occupancy Rate 105 Excess Beds Source: 2009 Annual Survey Data, CON Evaluation Section, MDCH.

Hospital Bed Need By Health Service Areas HSA 3 18 Hospitals 2,015 Licensed Beds 48.5% Occupancy Rate 505 Excess Beds HSA 4 26 Hospitals 2,970 Licensed Beds 51.7% Occupancy Rate 778 Excess Beds HSA 6 25 Hospitals 2,325 Licensed Beds 49.3% Occupancy Rate 595 Excess Beds HSA 7 12 Hospitals 1,096 Licensed Beds 52.1% Occupancy Rate 145 Excess Beds HSA 8 15 Hospitals 801 Licensed Beds 37.7% Occupancy Rate 199 Excess Beds Source: 2009 Annual Survey Data, CON Evaluation Section, MDCH.

CON and New Technology By statute CON Commission must appoint a new medical technology committee (NEWTAC) NEWTAC helps CON Commission identify new medical technology or services that may be appropriate for inclusion as a CON regulated clinical service NEWTAC can review new technology beyond the definition of the statute as assigned by CON Commission. Recent examples: DaVinci Robots Vascular Surgery Interoperative MRI Neuro-interventional radiology Proton Beam Megavoltage Radiation Therapy