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Monopoly of monopolies will go on for Georgia hospitals, thanks to lawmakers

“If you want to keep your doctor, you can keep your doctor.”

We now know that was “lie of the year” quality material, but the reason that remains a lie goes much deeper than Washington politics. Many of the reasons are rooted right here at home, with a well-funded group of established “nonprofits” doing everything they can to protect their turf. The result is a system stuck in decades old regulatory structures, anti-competitive business practices that are both protected and encouraged by Georgia law, and a system that rewards the “haves” while the state continues to struggle with lifelines to prop up the “have-nots.”

Georgia has a system of laws that govern our health care delivery system under the umbrella of Certificate of Need. It’s easy to devolve into health-care jargon here, but for those of us not health-care professionals or lawyers, it works kind of as follows:

A Certificate of Need is a state-granted monopoly franchise for a hospital. The state has to determine there is a need for medical services not currently being served, and then the provider granted the certificate must agree to provide a specific bundle of services. Supporters of the status quo say that this ensures that the services a hospital provides that they are guaranteed to lose money on (i.e, emergency rooms where they must treat anyone regardless of ability to pay) are offset by more profitable areas (oncology, orthopedics — virtually any service you see advertised as providers seek to gain extra for-profit patients).

After years of discussion and infighting within the medical community, HB 198 was proposed to break down the monopoly barriers and significantly reduce the advantages of the entrenched “haves” while leaving in protections for the “have-nots.”

HB 198 failed prior to crossover day, with a vote of 72 for and 94 against.. Legislative leaders went into the morning believing they had threaded the needle of compromise between the many influential and well-funded groups that lobby for medical services at the capitol. They ended the day with a major hospital system flipping their position to “no” and the bill failing by a wide margin. Leaders were not amused, but vowed to fight on with a scaled back approach.

What Georgia remains left with is a system where hospitals dictate where doctors can practice and how much they are compensated, and a system where it is difficult to grow a practice without the express consent, approval and direct or indirect partnership with a hospital holding a monopoly certificate franchise.

It’s clear that Certificates of Need give hospitals monopoly power their own markets, but what has been less than transparent is the coordination among hospitals to protect their monopoly power over the network of providers, insurance companies, and ultimately the patients they serve.

A 2011 Memorandum of Understanding between the Georgia Hospital Association and the Georgia Alliance of Community Hospitals creates a structure where the larger hospitals control the policy for the organization that is supposed to represent all. The association claims to represent “100 percent of the for-profit and nonprofit hospitals in Georgia,” per the agreement. The alliance membership is dominated by the major “nonprofits” of the state. The alliance members are not usually the ones you see in the headlines facing closure. Most of Georgia’s smaller, struggling hospitals come under the association of Hometown Health.

This memorandum of understanding between the association and the alliance states that the two will be in lockstep on all lobbying efforts regarding their member organizations. It is a point-by-point memorandum of how the organizations will share draft legislative agendas, and communicate throughout the process to ensure no disagreement — public or private — will grow between them.

Yes, in Georgia, you can choose your doctor. As long as the hospital granted monopoly power over your area approves of him, his business practices, and allows him to treat you on the hospital’s terms. And this will remain the same, because Georgia’s hospital monopoly of monopolies appears to have won at the Gold Dome once again.

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