Examining “certificates of need” after University of Iowa Hospitals and Clinics denied North Liberty hospital

A “certificate of need” is what’s keeping University of Iowa Hospitals and Clinics from building a new $230 Million hospital in North Liberty.
Published: Mar. 3, 2021 at 6:55 PM CST
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NORTH LIBERTY, Iowa (KCRG) -A “certificate of need” is what’s keeping University of Iowa Hospitals and Clinics from building a new $230 Million hospital in North Liberty. To open a new healthcare facility in Iowa, providers must prove a need for their services by going to the State Health Facilities Council to get a certificate of need.

“You apply to this, the board which then allows the existing facilities to oppose your application,” Joshua House told us, an attorney with the Institute for Justice.

That’s exactly what happened to the University of Iowa Hospitals and Clinics when they proposed a new hospital in North Liberty. Other area hospitals like UnityPoint Health St. Luke’s and Mercy Medical Center in Cedar Rapids, as well as Mercy Iowa City, claimed a North Liberty hospital would duplicate their services and ultimately hurt their own operations.

The Council denied the new UIHC hospital proposal in a close 2-3 vote.

Healthcare providers can apply for a certificate of need multiple times and UIHC has said they will try again.

In 2017, a Cedar Rapids ophthalmologist filed a federal lawsuit over CON law requirements. Dr. Lee Birchansky of Fox Eye in Cedar Rapids tried to get his certificate of need approved 5 times before the Council granted it and he was able to open his outpatient surgery center.

Joshua House with the Institute for Justice worked with Dr. Birchansky on his case, he says the Institute for Justice is still fighting certificate of need regulations across the country as 35 states have variations of CON laws.

“We’re not letting kind of innovation take place, we’re not letting people coming up with better more efficient ways to deliver these services happen because they have to get permission from the, kind of the old stalwarts before they’re allowed into the market,” House told KCRG-TV9.

We asked Suresh Gunasekaran, the CEO of UIHC for his thoughts on the CON law process after their application was denied.

“We think that the community’s voice should be heard on any proposal that we do. So for me honestly it makes no difference,” Gunasekaran told us.

There’s no indication certificate of need requirements in the state will be changing anytime soon, the topic came up in a meeting between democratic lawmakers just last week.

“I don’t think you want to see specific practices spun off that would potentially raise prices in kind of more routine care vs. specialties but I don’t think I’ve heard any conversation about certificates of need being revisited yet this year,” Senator Zach Wahls said in the meeting.

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