Session: State Capitol, Room 102 Juneau, AK 99801-1182 Toll Free: (877) 465-3719 Phone: (907) 465-3719 Fax: (907) 465-3258 Personal Web Site: www.johncoghill.com Interim: 119 N Cushman Street, Suite 211 Fairbanks, AK 99701 Phone: (907) 456-5081 Fax: (907) 456-8245

Sponsor Statement for HB 407
Certificate of Need Program

"An Act relating to the certificate of need program."

In trying to preserve the free enterprise system, I will do all that I can to protect our open market and the consumer's choice. This bill is an attempt to do this in the world of health care.

Under the current state statutes, if a health care provider in Fairbanks or the Mat-Su Borough wanted to build or supply services over $1 million dollars worth, they would have to obtain a Certificate of Need. In applying for that certificate of need they would have to prove to the government that a proposal would not adversely affect other health care facilities. This puts the government in charge of who can deliver health care in any area. I would rather see the customer and the health care providers have a greater choice in the market dynamics.

I don't believe that by eliminating the CON requirement for larger Alaskan communities there will be large influx of new medical facilities. This may have been true when the federal government subsidized CON programs, but the federal CON law was repealed in 1996. Since the repeal of the federal law, 14 states have repealed CON's. Another ten states have eliminated CON requirements for acute care facilities and additional nine states do not require CON's for ambulatory surgical centers.

More ambulatory surgical centers in Fairbanks would not, in my opinion, mean less business for existing facilities. It could mean however, more choices in providers and that fewer Fairbanksans may have to travel to Anchorage or the lower forty-eight for a medical procedure.

According to the attached Heartland article, in 1996 the Federal Trade Commission estimated that CON regulations increased the cost of hospital care nationwide by more than $1.3 billion annually.

This legislation will encourage competition in the larger Alaskan communities where the population would support competition while protecting the fragile balance of health care services in the smaller Alaskan communities.

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