House Select Committee on Certificate of Need Process and Related Hospital Issues Page 15
Recommendation:
18. The Committee recommends the General Assembly should continue to
support the NC AHEC residency program and the NC Office of Rural Health
and Community Care Rural Health Loan Repayment Program.
Finding:
Health care costs in North Carolina continue to increase despite efforts by the State to control
them. Most regulatory efforts, whether aimed at managing care or limiting the expansion of facilities
and technology to a State determined level of need, end up simply shifting costs from one area to
another that is more profitable. Lanier Cansler, Former Secretary of the North Carolina
Department of Health and Human Services noted that if the State wants to seriously address the
issues of affordability and sustainability of healthcare in the State "we must develop a vision of our
healthcare delivery system and then every modification to law, reimbursement process, policy, must
be focused on achieving that vision."
Recommendation:
19. The General Assembly should study reform of the health care market and the
health care delivery system in North Carolina to increase cost effectiveness
and quality of care through the encouragement of market driven competition
in the provision of health care services.
Finding:
A Certificate of Public Advantage (COPA) was issued by the State in 1995 as a condition of
allowing the merger of Memorial Mission Hospital and St. Joseph's Hospital to go forward. The
entity that emerged from the merger process is Mission Hospital, Inc., operated by Mission Health
Systems, Inc. ("Mission"). The COPA agreement was required by the State to offset the
anticompetitive effects of the merger on the Western North Carolina health care market. Since
1995, the COPA agreement has been modified twice. Mission has submitted the reports required
under the statutes and has been determined to be in compliance with the terms of the COPA
agreement. Nonetheless, hospitals, health care providers, and individuals continue to raise concerns
about the increase in Mission's market power and whether the COPA agreement has been effective
in balancing the anticompetitive effects of the merger. Further in-depth investigation into the
economic impact of Mission's COPA on the health care market, especially in light of recent changes
in the structure of the health care industry, may be necessary to resolve these issues and ensure the
provision of low cost, high quality health care to the people in Western North Carolina.
Recommendation:
20. The Committee recommends that the hospitals, health care providers, and
interested individuals in the region make every effort to resolve their
differences regarding the COPA prior to the end of the 2013 Session of the
General Assembly. If a satisfactory resolution to the issues is not reached in
that time, the Committee recommends that the General Assembly conduct a
study of the economic impact of the COPA and the effectiveness of that
agreement.