UPDATE: As of June 2019, the Governor of Florida has now signed this legislation.
After nearly two decades of debate, the Florida legislature passed HB 21 on April 29, 2019, effectively repealing Certificate of Need (CON) requirements for general hospitals and tertiary services. Once signed by the Governor, these changes are expected to take effect July 1, 2019.
This legislation will have tremendous impact on health systems throughout Florida. Some risks and opportunities are readily apparent—others are less obvious. Is your organization prepared to protect and enhance its strategic position in light of these changes? It all starts with asking the right questions.
What Risks Does the CON Repeal Pose for My Organization?
- Is it possible or likely that a competitor will build a new hospital in our market?
- Is there a significant population in our service area for whom services are not easily accessible?
- Are there large areas with an “attractive payer mix” that could be “cherry-picked?”
- Have competitors established a significant presence of physician or outpatient services in the area—particularly freestanding emergency departments?
- Does our organization need to shore up vulnerabilities?
- Is a large portion of our medical staff restless, dissatisfied, or disconnected from our activities?
- Have we struggled to meet community expectations of quality and patient satisfaction?
- Do we have limited specialty offerings resulting in significant outmigration to other markets?
- What are our top priorities for mitigating risks?
- Preemptively developing outpatient access points
- Strengthening integration with physicians
- Developing service lines
- Pursuing innovative contracting models with payers and employers
- Considering new affiliations or partnerships
What Opportunities Should We Pursue?
- Should we consider the development of a new hospital or service to decentralize, expand capacity, or grow into a new market?
- What is the long-range market and financial feasibility of such a project?
- How should we consider potential competitive responses?
- What are the risks of not pursuing a project where market demand is evident?
What Other Implications Might Be Associated with the CON Repeal?
- Will this drive further consolidation in our market?
- Do we need to reconsider scale and partnerships?
- What have other states experienced in the aftermath of the CON repeal?
- How quickly did changes occur?
- Was there a “boom and bust” cycle?
- What other lessons can we learn?
As healthcare strategy experts with extensive experience in Florida, PYA can assist in asking the right questions; formulating and assessing options; and facilitating thoughtful dialogue to chart the right course for your organization. To discuss how the CON repeal might affect your organization, contact a PYA executive below at (800) 270-9629.
© 2019 PYA
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