Study Analyzes Change in Patient Costs for Heart Surgery
A recent study published by Medical Care Research and Review indicates that certificate of need laws neither reduce healthcare costs nor keep mortality rates down for heart bypass surgery. The study, which was sponsored by a grant from the National Heart, Lung and Blood Institute at the National Institutes of Health, analyzed Medicare data from 1991 to 2002 in 34 states to determine whether states that expelled their certificate of need laws demonstrated a change in patient costs or reimbursements for open-heart surgery (specifically, coronary artery bypass graft surgery (CABG) or percutaneous coronary interventions). During the course of the study, 7 out of the 34 states studied expelled their certificate of need laws.
Certificate of Need Deregulation Resulted in Reduced Patient Costs
The study found that the savings realized from lowering the average costs per patient outweighed any additional costs that may be associated with certificate of need deregulation, including any additional costs associated with hospitals building new facilities to perform heart bypass surgery. Specifically, the study found that states that removed certificate of need regulations experienced a 4 percent decrease in the average cost of patient care.
Study May be Instructive to Policymakers
Vivian Ho, lead author of the study and chair in health economics at Rice University's James A. Baker III Institute for Public Policy, hypothesized that the cost savings associated with the deregulation of certificate of need laws prompted hospitals to deliver higher quality of care in order to maintain a competitive edge among patients: "The desire to attract more patients in a competitive market leads hospitals to offer higher quality care [...] It may sound counterintuitive, but recent studies show that higher quality surgery lowers costs because costly hospital complications are avoided when one improves care." Ho also believes that the results of the study should "serve as a lesson to policymakers as they consider the future" of certificate of need laws: "We discovered in a previous study that states that removed Certificate of Need regulations for open-heart surgery experienced no change in patient mortality, [...] Now that we have learned that the cost of patient care is also lower after deregulation, I am doubtful of the value of these regulations."
Vivian Ho and Meei-Hsiang Ku-Goto, "State Deregulation and Medicare Costs for Acute Cardiac Care," Medical Care Research and Review (Oct. 2, 2012).
Jeff Falk and David Ruth, "Rice U. study: State deregulation of open-heart surgery beneficial to patients," Rice University News & Media (Oct. 3, 2012).
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