News & Analysis

How the CON Process Gives Communities a Voice

Headshot of Daniel Carter, partner at Ascendient

Daniel Carter

A smiling young woman speaks into a megaphone

Recent hospital litigation in North Carolina reminds me that the public comment requirement is one aspect of CON that might get lost in the shuffle. But the lesson in this particular case was clear: Ignore it at your own risk.

As quick background, AdventHealth Hendersonville was applying to build a new, 67-bed hospital in nearby Asheville, a market in which every existing inpatient bed was operated by HCA-owned Mission Health. Mission quickly filed its own application for 67 additional beds on its main campus and then sued when the state sided with Advent.

(Full disclosure: Ascendient has done strategic planning work for another competitor in this region, but we were not involved in this particular CON or the ensuing litigation.)

Despite the convoluted facts in the case, ALJ Michael C. Byrne issued an incredibly readable, 50-page opinion in favor of AdventHealth. While many discussions of this case may focus on some of the obvious topics around substantial prejudice or other broad issues, I found Judge Byrne’s focus on the public hearing process especially fascinating.

Among the many noteworthy paragraphs, this one stood out for me:

“Contrary to most public hearings held on CON applications, per the testimony of the Agency witnesses, the public hearing in this case generated considerable public interest, with many persons, representing multiple area interests, appearing at the hearing to express their views on the matter. While not exclusively so, it is found as a fact that most of the negative commentary from the public at the public hearing was directed at Mission’s services to the community generally and, specifically, to the prospect of Mission receiving the CON at issue in this case.” [emphasis original]

Any quick Google search will reinforce the public opposition that Byrne is referring to. Residents of this county have been extremely critical of perceived mismanagement by the new ownership at Mission, including closed facilities, reduced services, and a mass exodus of providers.

Making Local Voices Heard

This litigation is an important reminder for me of something that might not be obvious at first glance: As hospitals consolidate and decision making becomes more and more distant from local communities (neither Advent nor HCA is based in North Carolina), the CON process is often the last bastion of formalized, consequential community feedback.

In a non-CON state, big health systems are more or less free to do what they want. Without CON requirements, a provider like Mission could simply have added 67 beds to protect its leading market share and discourage new competition. There might have been zoning meetings or some other procedural hurdles, but that’s not the same as a CON public hearing, which is specifically designed to elicit feedback on the quality and quantity of healthcare resources in a community.

Some critics of CON will say that the whole process is too centralized or bureaucratic, but I think that overlooks the public notice/hearing requirement, which exists to some degree in most states with CON programs. As healthcare decision making grows increasingly remote, these formal mechanisms can be one way to ensure that community voices are heard.

Mind Your Public

Of course, there’s also a lesson in this litigation for hospitals and health systems: You have to mind your public. Business planning is important for sustainability, but you need to communicate your rationale and be deliberate in seeking public feedback.

I’ve been an expert witness in CON proceedings for more than two decades, so I know how often public hearings can sway the regulators oneway or another. You want the data on your side, certainly – but you don’t want to see the public lined up on the other side.

For instance, I was involved in planning and CON work for a county’s sole hospital that wanted to develop a new replacement facility in amore populated area of the county. The data suggested that such a move was key to survival, but neighbors of the existing facility were outraged. When they mobilized en masse to oppose relocation, the CON application was denied – twice.

Sadly, the data proved to be right, and the hospital eventually had to close entirely, leaving more than 70,000 county residents with no acute care facility.

Conversely, another county hospital proposed a similar relocation, but managed to solicit strong support from its community. In that case, despite opposition from competing hospitals, the regulators approved relocation.

The lesson is clear: If you’re not minding your public, no regulatory process is going to save you.

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