When Gov. Rick DeSantis signed the repeal of Florida’s certificate of need laws last month, the expansion plans of hospital systems, including Cleveland Clinic Florida, were put into the hands of the healthcare companies themselves instead of left to the mercies of a state agency.
Before the law was repealed, hospital systems could only expand and add certain new programs if the state judged there was need of the new services.
Until now, Florida’s Agency for Healthcare Administration, or AHCA, has been responsible for determining whether there are already enough hospitals or services available in a given area. If the state deemed service was already sufficient, expansion was not allowed.
The repeal, which went into effect July 1, means market forces – rather than state-certified need – can bring about the construction of new hospitals and the addition of complex service lines such as heart transplants and neonatal intensive care units.
Critics of certificates of need have long maintained the CON approval process is expensive, drawn-out and often politicized. Furthermore, they argued, existing hospitals shouldn’t have their patient volumes protected from new entries to the market.
“Organizations that have historically provided average or below average care will have to step up their game,” said Cleveland Clinic Florida president and CEO, Dr. Wael Barsoum, as quoted in an article in Health Leaders magazine. “Otherwise, other providers will come in and compete aggressively with them to force an improvement in quality.”
Florida’s certificate of need laws, first enacted nearly a half-century ago, got in the way of Cleveland Clinic building its first Florida hospital in Weston. In the Health Leaders article, Barsoum outlined a history already known to those who followed the system’s year-long bid to take over Indian River Medical Center, a deal that was unaffected by certificate-of-need laws.
“For years and years, we were not able to open a Weston hospital,” Barsoum told the magazine. “It took many attempts before we finally got one open.”
The laws also stopped the system from expanding its Naples hospital to include open-heart surgery. The denial of that certificate of need was largely blamed for the system selling off its Naples property.
Cleveland Clinic Weston entered the transplant arena in 2012 after being granted certificates of need for heart, liver and kidney transplant programs.
Late last fall, just as Cleveland Clinic was finalizing mergers with Indian River and Martin Health, the hospital system’s leaders were in Tallahassee seeking a certificate of need to add bone marrow transplants to its Weston capabilities.
The repeal has made that effort moot and cleared the way for the bone marrow program.
As yet, Barsoum has not commented on building a hospital in Palm Beach County. Cleveland Clinic has long eyed Palm Beach County as an expansion market but certificate of need laws presented a significant obstacle to starting a new hospital. The company recently acquired property in Wellington that could accommodate a small hospital, but so far, Cleveland has announced only phase one of the project: medical office space.
While there were no certificate-of-need requests on file with the state from any hospital systems to expand services in Indian River County, the repeal may bring capabilities closer to Vero Beach.
In Orlando, two hospitals – Arnold Palmer Medical Center and Nemours Children’s Hospital – appear poised to start pediatric heart transplant programs that had been blocked by the certificate of need laws.
