Two Cedar Rapids doctors and one of their patients have filed a lawsuit challenging a state law that they argue stifles competition by preventing them from opening a new surgical center for patients.
The State Health Facilities Council reviews requests for the expansion of hospital and health care clinics in Iowa, when the project costs more than $1.5 million.
Dr. Lee Birchanshy has asked the council four times for permission to open an outpatient surgery center next to his Cedar Rapids office for cataract and other eye surgeries, but he’s been turned down each time.
“It’s been very frustrating because what I want to do is something that’s best for patient care,” Birchansky said during a news conference outside the state capitol on Wednesday. “…Sick people go to hospitals. Healthy patients need to stay out of hospitals and get their surgery done in an office-type, outpatient setting.”
Darpana Sheth is a senior attorney for the Institute of Justice, the Virginia-based group that’s taken on this case.
“The only purpose of ‘Certificate of Need’ requirements is to protect existing facilities from competition and essentially funnel more money into their pockets, at the expense of competition from outsiders,” she said.
In January, Governor Branstad asked legislators to shut down the “Certificate of Need” process. Branstad suggested the council was more interested in “shielding” existing hospitals from competition than in what impact new facilities might have on patient care and costs.
Hospital executives successfully urged legislators to keep the review process in place, however. The CEO of one eastern Iowa hospital told lawmakers “the free market does not work” in health care. Hospital executives say for-profit clinics can “cherry-pick” patients and leave traditional hospitals footing the bill for patients who don’t have insurance or who require the most expensive treatments.
Sheth argues ‘Certificate-of-Need’ laws are unconstitutional because they force licensed doctors to get a “government permission slip” to compete with already-established businesses.