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Editor's Page
Your Necessary Evils
Dan O'Connor
Publish Date: October 10, 2007

Dan O Federal agencies last month released a pair of reports that left two of outpatient surgery's necessary evils, accreditation and certificate of need laws, bloodied and bowed but hardly beaten.

Dan O Necessary evils? Yes, things that, while not always pleasant, are meant for your own good. They can be personal, like paying taxes or getting a colonoscopy. Or professional, like getting your facility accredited or keeping the supply of healthcare providers in check. Above all, though, they're indispensable tenets. But as you'll see, a few federal agencies may disagree with us on that.

? GAO rips JCAHO. A 56-page report from the Government Accountability Office (GAO) slams the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), claiming that the accrediting agency failed to spot "serious deficiencies" at many hospitals it certified and recommending that JCAHO be subject to greater federal oversight. According to the report, JCAHO's pre-2004 accreditation process missed more than three-fourths of the hospitals found by state survey agencies (SSAs) in CMS's annual validation survey sample to be deficient in Medicare requirements. JCAHO also didn't identify about 69 percent of serious deficiencies in Medicare requirements found by SSAs. The report's timing is suspect, as JCAHO made sweeping changes to its accreditation process earlier this year.

? FTC rips CON laws. A 361-page report from the Federal Trade Commission and the Department of Justice tells us that CON laws were a mistake on the order of, say, New Coke. The report says that CON laws suppress competition and don't curb healthcare costs, and that the 36 states with CON laws should rethink them.

While even hospitals that benefit from the barriers the system creates for new competitors don't always like having to ask the state for permission every time they want to expand, what about the law's unintended role as a protector of the state's charity-care network? What about the evidence that free-for-all competition hurts hospitals? For example, in Ohio, which dropped CONs in 1995, the number of ambulatory surgical facilities and diagnostic imaging centers ballooned between 1997 and 2000. During the same period, 16 full-service hospitals closed.

Just as the reports leave little doubt that accreditation and CON laws require repair and reform, nowhere is there evidence that the surgical industry is better off without them.

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