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Sunday, 15 February 2015 22:00

Alliance for Health to set higher bar for review of certificate-of-need projects

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Paul Brand, president and CEO of Alliance for Health Paul Brand, president and CEO of Alliance for Health COURTESY PHOTO

Steering the focus to major investments that can affect the market, Alliance for Health has altered its criteria for reviewing health care projects that require state certificate-of-need approval.

The planning agency’s Evaluation Board now limits the local review to projects with a value of $10 million or more, the proposed launch of a major new medical service in the region such as organ transplant, or the planned consolidation of organizations or a change in ownership.

The latter criteria could include the proposed acquisition of an 80-percent stake in Metro Health by Franklin, Tenn.-based Community Health Systems Inc. Metro has indicated publicly that the deal is subject to CON review. Any local examination of the deal would depend on how the final agreement between the two organizations is structured.

“Our agency is narrowing the focus of CON review and broadening the scope of public discussion concerning health care projects of community interest,” said President and CEO Paul Brand. “The Evaluation Board has chosen to focus their efforts on the CON projects that matter.”

The change maintains the Grand Rapids-based Alliance for Health’s role as the only organization in Michigan that under law conducts local reviews on projects seeking CON approval and issues a recommendation to the Michigan Department of Community Health.

By focusing on reviewing higher-end projects, Alliance for Health can generate “a savings of our resources for an unreimbursed responsibility going forward,” Brand said.

Many CON applications to the state are for expenditures for far less than the Alliance for Health’s $10 million threshold and typically are filed for organizations to purchase or upgrade their medical equipment.

Under the new criteria, the Alliance for Health Evaluation Board – consisting of representatives from health care and business – would have reviewed less than eight projects annually in the last three years across a 13-county service area. The Evaluation Board made the change after a “comprehensive review that included interviews with 45 community stakeholders in deciding to change the CON application process,” according to a statement from the Alliance of Health.

The new guidelines still allow any Alliance for Health member to request a review of a project that does not meet the criteria but “may have impact on quality, access and cost of health care services in the region.”

“This is a good way for the Alliance to continue to perform an important function for West Michigan in a manner which is consistent with the Alliance’s resources,” said Carl Verbeek, a retired health care attorney from Varnum LLP and a long-time Alliance for Health volunteer. “These are the issues which would have a significant impact on the health care services for this area, so they warrant community involvement.”

Among the recent projects that would have fallen under the new review criteria in 2014 are Spectrum Health’s 165-bed, $25.5 million Rehab and Nursing Center in Grand Rapids and a 133-bed, $11.9 million nursing home in Grand Haven by Ciena Healthcare.

Among the projects in 2013 that would have been reviewed under the new criteria were a new $25 million hospital for Sparrow Ionia Hospital, Metro Health’s $13.8 million outpatient surgical center in Grand Rapids, and a $35.3 million renovation of the operating rooms at Mercy Health Saint Mary’s.

The change in CON review criteria is part of a broader evolution of Alliance for Health’s role to focus more on health issues in the region, rather than on the health care industry.

As part of that effort, Alliance for Health plans to seek funding from a $70 million state fund to support innovation projects to improve community health. The state created the State Innovation Model fund late last year with money received from the federal Center for Medicaid and Medicare Services.

Alliance for Health will apply for funding and is working to gain broad support in the region to “help West Michigan become a community health improvement model for the state and the nation,” Brand wrote in an email to members.

“To us, this seems a natural progression of the traditional role of the Alliance for Health, and we are pursuing the opportunity to ensure we are selected,” Brand wrote.

Read 2012 times Last modified on Sunday, 15 February 2015 16:20

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