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Hospitals, medical entrepreneurs fight over CON law

Ambulatory Surgery Reimbursement Update, April 19, 2006

A fight is on between hospitals and a group of medical entrepreneurs over Alaska's certificate of need (CON) law, according to the Alaska Journal of Commerce.

The two sides are debating House Bill 287 which, if passed, would repeal CON requirements for medical facility investments of more than $1 million in communities of 25,000 people or more.

The state representatives sponsoring the bill argue the CON law is relied on by major hospital groups to block competition from outpatient clinics.

"This bill protects free enterprise," said state representative Bob Lynn in a hearing on the bill, according to the Alaska Journal of Commerce.

"The free marketplace should decide if a business is needed, not the government. A healthcare facility or nursing home should not have to beg for a government-issued CON to open a business, so as to protect similar businesses from healthy competition," Lynn said.

Providers opposed to the bill argue that repealing the CON law will allow hospital competitors to provide only high-profit services, such as surgery.

This could cause hospitals to lose patients and would force hospitals to raise prices to cover the losses of not providing these services as frequently.

To view the story in the Alaska Journal of Commerce, click here.

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