New York's Hospital Project Approval Process May Change

The lengthy approval process faced by hospitals seeking to purchase equipment or undertake construction projects may soon get shorter.

State health officials are considering changes to the "certificate of need" process, a method for approving capital expenditures for all items, from new magnetic resonance imaging machines to parking lots and buildings.

Although major projects would still face tough scrutiny, officials would ease up on smaller items. At least one proposed regulation, which would simplify the process for some projects of less than $10 million, was published Wednesday in the State Register. Next month, the planning committee of the State Hospital Review and Planning Council has invited stakeholders to testify at a hearing.

While hospitals have been frustrated with the certificate of need process for years, some said the changes are seen as a follow-up to the Berger Commission, a state health care panel that was charged with streamlining health care and which ultimately recommended closure for nine hospitals statewide.

"Now that the Berger Commission is gone, we're essentially at a new square one where health care costs are high, we still have a lot of problems, and the question is what is an effective strategy going forward," the director of health care finance for the United Hospital Fund, Sean Cavanaugh, said. Mr. Cavanaugh, who recently co-wrote a report on community health planning with the fund's president, James Tallon, said the certificate of need process is part of a larger discussion about the future of health care.

But hospital groups said few items generate as much frustration as the state's certificate of need process, which is more stringent than in other states. "Timeliness is the overarching concern. Projects can take years to get through before you're able to move forward, and many times, these are not massive construction projects," the president of the Healthcare Association of New York State, Daniel Sisto, said. "We're not looking for more trains to run, just for the trains to run on time."

Hospitals said delays add to costs, particularly when they are undertaking renovations or new construction.

"Our members have told us that they build in approximately a 10% increase in cost to a project merely because of the fact that project costs will go up that much during the time that they have to go through the certificate of need process," a senior vice president and general counsel at the Greater New York Hospital Association, Susan Waltman, said.

For upstate and suburban hospitals, which face competition from hospitals in neighboring states where restrictions are less stringent, officials said looser regulations would "level the playing field."

"It's a way of allowing the market to work in a controlled manner, where the state has a responsibility to make sure quality, safety, and accessibility are preserved where it needs to be, and stepping out of issues they don't need to be, like whether I should put a new roof on the hospital," the president of the Northern Metropolitan Hospital Association, which represents 32 hospitals in the Hudson Valley, Neil Abitabilo, said.