UPDATE: St. Elizabeth has issued a statement in response to Mayor Meyer’s line of questions at the meeting. You can read it here. —LINK nky editorial, Oct. 23., 2023.
A Tuesday-night visit to the Covington Board of Commissioners from Kentucky Rep. Marianne Proctor (R-Union), who had come to speak out against medical certificate of need laws in Kentucky, was overshadowed by a conversation between the commission members and an attorney from St. Elizabeth Healthcare, Mark Guilfoyle, who had come to defend certificate of need and the St. Elizabeth hospital system.
The commissioners were worried that St. Elizabeth might employ certificate of need to suppress the establishment of new physicians’ offices at the former IRS site development. They also used the meeting as an opportunity to shine light on the dearth of primary care offices in the city.
Kentucky’s medical certificate of need laws require that healthcare institutions providing certain services must first prove a communal need for such services before establishing facilities in an area. Certificates are issued by the Kentucky Cabinet for Health and Family Services, and there are currently 21 medical services that require a certificate of need, according to Kentucky’s state health plan. These services include ambulatory surgery centers, residential psychiatric facilities and nursing homes among others.
In addition, an established provider can challenge the cabinet’s granting of a certificate of need to a new facility that provides one of the flagged services by appealing to the courts.
Certificate of need laws first appeared in New York in the 1960s. The laws gained favor at the federal level in 1974 under the Nixon Administration with the passage of the National Health Planning and Resources Development Act, which saw an influx of federal funding into state healthcare systems.
Over time, the federal government began retracting its funding, and the laws gradually lost favor at the national level. Many states began discarding their certificate of need laws as a result: Today, for example, Ohio and Indiana only require certificate of need for the establishment of elder care facilities.
Although they’re not the only ones critical of certificate of need, Proctor and her allies in the libertarian wing of the Kentucky Republican party have been spearheading efforts to do away with or at least change the policy.
Proctor had introduced legislation to repeal certificate of need in the last legislative session, but the bill failed to pass. The legislature later established a task force to consider possible reform of certificate of need. Proctor sits on the task force.
Proponents of certificate of need laws claim that medical markets can become over-saturated in the absence of this type of regulation. They also argue that certificate of need laws make it easier for rural communities, where it’s difficult for hospitals to turn a profit, to maintain access to a medical safety net.
On the other hand, opponents of certificate of need claim that it adds an extra layer of bureaucracy to an already administratively top-heavy sector. Additionally, opponents argue that certificate of need requirements provide a mechanism by which large healthcare organizations can establish monopoly power over particular regions.
The issue is salient to Northern Kentucky, and conversations surrounding the regulations often zero in on St. Elizabeth Healthcare, one of the largest healthcare providers in the tri-state, which some have characterized as a monopoly that uses certificate of need to secure its market share.
St. Elizabeth had successfully challenged the establishment of a Christ Hospital ambulatory surgery center in 2018. Christ Hospital had been granted a certificate of need in 2017, but St. Elizabeth successfully appealed the decision, arguing that the center would drive out lower-income patients in favor of patients with commercial insurance plans and enough income to self-pay.
Debates over the laws have already occurred publicly in Kenton County. Earlier this year, Proctor visited the Erlanger City Council, where she shared her views on the laws and floated the idea of a city resolution to support reform. The subsequent meeting saw representatives from St. Elizabeth, other medical institutions as well as political advocacy groups crowd into the Erlanger council chambers, where they debated the necessity of the laws. The Erlanger City Council eventually cast a 6-3 vote in favor of reform. Fort Wright has also voted to support reform.
Proctor characterized certificate of need as a “permission slip” from the state government in her speech to the commission. However, notably, she did not ask the commission to pass a resolution supporting reform as she did in Erlanger.
“While we have been changing our entire tax code structure to be more competitive with our neighboring states, what we haven’t been doing is changing our healthcare to be more competitive with other states,” Proctor said in her speech. “So that’s one of the reasons why this has become a hot issue right now. I think there is a demonstrated need that we lack services.”
Other residents from around the region came out to express support of repealing certificate of need or to level criticism at St. Elizabeth. Two described horror stories of poor treatment and long emergency room wait times at St. Elizabeth facilities. Many of the speakers had also spoken out against certificate of need in Elranger.
Kentucky Sen. Gex Williams (R-Verona) also attended and advocated for certificate of need reform, although his comments were less pointed than the other speakers.
St. Elizabeth had two defenders: Guilfoyle, who’s also spoken to the task force in Frankfort, and local community advocate Mike Hammons, who formerly sat on St. Elizabeth’s board.
“I’m not so sure that changing certificate of need is a solution,” Hammons said, arguing that St. Elizabeth often took hits to their financial bottom line to ensure that everyone in the community, especially people reliant on Medicare and Medicaid, could have healthcare access. He also spoke about the system’s donation efforts and support of local wellness campaigns and nonprofits.
Guilfoyle was the last speaker on the docket. He passed out some charts to the commissioners attesting to St. Elizabeth’s patient demographics and financial structure. Like many who have defended St. Elizabeth in the past, he characterized St. Elizabeth as a “safety net” hospital. This is not an official legal designation but is, instead, a shorthand referring to St. Elizabeth’s policy of taking in patients regardless of their ability to pay for care.
The mayor and commission had questions for Guilfoyle after he’d concluded his initial statement.
Meyer projected a map of the city up on the chambers’ wall that showed the location of the St. Elizabeth physicians’ office, where the hospital system’s primary care was located, at least in Covington.
“There used to be physician offices on Scott Street,” Meyer said to Guilfoyle. “There used to be physician offices in Latonia. Why can’t we get physicians’ offices located in Covington where it’s convenient for our people to access their primary health care?”
Although small, privately owned primary care practices are peppered throughout Covington, much of the primary care in the city has consolidated under the banner of St. Elizabeth, whose resources and structure make it easier to manage a practice. Meyer and the commissioners were critical of this consolidation, arguing it created gaps in care access, especially in the southern reaches of the city.
Meyer’s main worry was the possibility that St. Elizabeth could oppose the establishment of medical providers at the IRS development site.
“So if Covington as part of our IRS development, we reach out to a Cleveland Clinic to a Mayo Clinic [and] we want to get some specialized health care service in Covington in part of the IRS site, would St. Elizabeth and the certificate of need apply?” Meyer asked point blank.
Guilfoyle said it wouldn’t, at least as it relates to primary care facilities and urgent cares, which are not subject to certificate of need.
“[Certificate of need] just simply is not a barrier to that kind of development,” Guilfoyle said.
Meyer pressed the issue.
“Would it be possible that… the city could get a written statement from St. Elizabeth’s saying that if we recruit a healthcare provider to the IRS site that St. Elizabeth will not use the certificate of need to oppose the location…?” Meyer asked.
“I could carry that back,” Guilfoyle said.
Commissioner Tim Downing wasn’t satisfied with Guilfoyle’s answer and asked Guilfoyle to elaborate.
“Certificate of need is not a barrier but,…it appears that at times St. E is…,” Downing said. “If that’s your statement, that St. E will continue to leverage the [certificate of need] to prevent certain services, help us understand what are those? If you’re saying that there’s a list of services that you won’t, what are the services that you will?”
That, Guifoyle said, is a complicated question.
“And it really kind of depends on what you’re talking about,” Guifoyle said.
Guilfoyle said that if an ambulatory surgery center, like the one Christ Hospital tried to establish five years ago, or something that “hurts us as a safety-net hospital,” they would oppose it.
Watch the full meeting, including Proctor’s statement, public comments and the exchange between Guilfoyle and the commission at TBNK’s website.
The next meeting of the Covington Board of Commissioners will take place on Tuesday, Oct. 3 at 6 p.m. at Covington City Hall on Pike Street.