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SENATE REPUBLICAN
HEALTH FACILITIES
PLANNING BOARD
TASK FORCE REPORT
Senator Bill Brady, Chair
Senator Pamela Althoff
Senator Brad Burzynski
Senator Dale Righter
November 2006
INTRODUCTION
The Senate Republican Caucus
convened a Task Force to examine the Illinois Health Facilities
Planning Board in response to concerns that recently adopted
"reforms" that were intended to prevent political corruption and
influence-peddling actually had a detrimental impact on the ability
of the Board to operate effectively.
Those allegations had prompted the
Governor to initiate changes that reduced the Board's membership,
restricted Board communications and restricted Board membership (P.A.
93-889). Although these changes were portrayed as reforms that
would curb past abuses, the Senate Republican Task Force found that
the "reforms" were only successful in restricting the Board's
ability to operate efficiently. The corruption that the legislation
was intended to curtail was more effectively curtailed by the
ensuing federal investigation than the Governor's legislation.
Unfortunately, the legislation initiated in reaction to the scandal
proved to be short-sighted and actually counter-productive.
Facing a July 1, 2006, sunset date,
the General Assembly had to deal with the Health Facilities Planning
Board issue once again. But rather than investigating the impact
that P.A. 93-889 had on the Board, the Democrat-controlled
General Assembly passed a simple sunset extension of the Board for
an impractically short time frame of only nine months (P.A.
94-983). Many have speculated that P.A. 94-983 was
politically motivated and spurred by a desire to retaliate against
hospitals that opposed legislation introduced by the Illinois
Attorney General. Whatever the reason for the short sunset date, it
resulted in severely hampering the Board's ability to retain and
recruit crucial staff. P.A. 94-983 contained no review of the
Board's progress under the changes that were enacted in P.A.
93-889 and therefore did nothing to address vital issues that
have been festering for almost two years.
The inability of the
Democrat-controlled General Assembly to adequately address a process
so vital to the health and well-being of millions of Illinois
residents is disturbing. The decisions made by the Board are
critical to the health-care decisions and emergency medical care for
every Illinois family and should be addressed in a thorough and
thoughtful review such as the Senate Republican Caucus has
initiated.
The charge of the Senate Republican
Task Force was to examine the efficiency, objectivity and utility of
the Board. After three hearings, the Task Force found that the
certificate-of-need process is unpredictable and that recent
legislation has severely curtailed the ability of the Board to
function effectively. Further structural and operational reforms are
necessary for the Board's efficient operation, as is a comprehensive
review of the usefulness of the Board and the certificate-of-need
process in the governance of the health-care industry in future
years.
TASK FORCE RECOMMENDATIONS
In the three hearings conducted by
the Senate Republican Health Facilities Planning Board Task Force in
Chicago, Springfield, and Plainfield, the members learned that the
recent legislation reducing Board membership (P.A. 93-889), limiting
the Board's ability to communicate (P.A. 93-889) and establishing an
unrealistic Board sunset date (P.A. 94-983) had a severe impact on
the ability of the Board to maintain proper and efficient
operations. The members also learned that many of the Board's
decisions were capricious, untimely and inconsistent. Therefore, the
members of the Senate Republican Health Facilities Planning Board
Task Force make the following recommendations to add stability,
efficiency, predictability, and greater accountability to the health
facilities planning process:
Reform Board Procedures
1. Adopt a model that shifts the
burden of proof. Instead of assuming that new facilities are not
needed and requiring an applicant to prove that a need exists for a
new facility, create a presumption that new and expanded facilities
should be approved unless the Board provides documentation that a
facility will either add to the costs of health care or curtail
access.
2. Require the Board to provide
written decisions of all substantive actions taken by the Board
(similar to other regulatory agencies, such as the Illinois Commerce
Commission).
3. Require at least one Board member
to be present at each public hearing.
4. Require the Board to convene a
sub-committee to regularly review rules and make annual
recommendations for rule revisions.
5. Require the Board to promulgate
rules that identify high-growth areas of the state and give special
consideration to those areas when a request from those areas is
pending before the Board.
Improve Board Operations
1. Increase Board membership from five
members (currently four members serve with one vacancy) to nine
members.
2. Reinstate categorical membership to
the Board (one physician, one hospital representative, one nursing
representative, one nursing home representative, one representative
with health-care financing expertise).
3. Reduce Board membership
restrictions (relative ties to health-care industry should not
preclude service on the Board).
4. Extend Board Sunset Date to June
30, 2011.
5. Exempt the Illinois Health
Facilities Planning Fund from Section 8(h) of the Illinois State
Finance Act (fund chargeback authority).
Prepare for the Future
Convene a Task Force of the General
Assembly to examine and report on future recommendations concerning
the Board.
REFORM BOARD PROCEDURES
1. Adopt a model that shifts the
burden of proof to the Board from the health-care facility
applicant. Instead of assuming that new facilities are not needed
and requiring an applicant to prove that a need exists for a new
facility, create a presumption that new and expanded facilities
should be approved unless the Board provides documentation that a
facility will either add to the costs of health care or will curtail
access.
Under the current construct of the
Board, health facilities must come before the Board and prove to the
members of the Board that the project the applicant wishes to
undertake is permissible under the Board's current rules.
An applicant, whose purpose is to
provide health-care services, should not have to justify a desired
action to the Board. Instead, the Board should be required to
demonstrate that the requested project either 1) unnecessarily adds
to the cost of health-care services, or 2) diminishes access to
health-care services, in order to deny an applicant's request. This
reform measure will prevent the Board from halting or stalling
health-care development, while at the same time, enabling the Board
to fulfill its statutory mission of health-care cost containment and
ensuring health-care access.
2. Require the Board to provide
written decisions of all substantive actions taken by the Board
(similar to other regulatory agencies, such as the Illinois Commerce
Commission).
The Board currently takes a voice vote
that is recorded. The rationale for that vote, if any exists, is
stated in the transcript of the meeting. Interested parties must
wade through a lengthy and often uninformative transcript if they
wish to determine how and why the Board concluded a specific
application. If the Board were required to write a brief rationale
of each decision, there would be a clear and concise written history
of previous Board actions. This simple step would save time, and
potentially millions of dollars, by enabling future applicants to
clearly understand the rationale of the Board in deciding similar
matters.
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 3. Require at least one Board member
to be present at each public hearing.
Board members are never present at
hearings where public testimony on a specific project is being
considered. Board staff attends these meetings and conveys the
information of the hearing to the Board members. Given the small
size of the Board, a requirement that at least one member attend
each public hearing could be impractical. But with the expansion
back to a nine-member Board, it is both reasonable and prudent to
require at least one Board member for every public hearing. If the
project is important enough that it spurs a request for a local
hearing, the Board should honor that request with some
representation from the Board membership.
4. Require the Board to convene a
sub-committee of the Board to regularly review rules and make annual
recommendations for rule revisions.
P.A. 93-889
required the Board to complete a review of the Board's rules by the
end of 2004. This rule revision has yet to be completed and is not
expected to be completed until summer 2007. The delay is simply
unacceptable. To prevent similar failures in the future and to
ensure that the administrative rules governing the Board are
constantly reviewed and updated to keep up with the ever-changing
face of the health-care delivery system, a sub-committee of the
Board should be impaneled to regularly review the administrative
rules governing the Board and the certificate-of-need process.
5. Require the Board to promulgate
rules that identify high-growth areas of the state and give special
consideration to those areas when a request from those areas is
pending before the Board.
High-population-growth areas pose the
biggest challenge to health facilities planning. Such issues as
travel time versus distance as a determining factor for facility
location can have a tremendous impact on health care in high-growth
areas, especially in northeastern Illinois. For this reason, the
Board should promulgate specific rules that give special
consideration to certificates-of-need that are submitted for
high-growth areas. The rules should define a high-growth area and
set parameters for how certificate-of-need requests from high-growth
areas will be addressed differently from other certificates-of-need.
IMPROVE BOARD OPERATIONS
1. Increase Board membership from five
members (currently four members serve with one vacancy) to nine
members.
The current size of the Board makes it
very difficult for the Board to operate efficiently. With the
current size of the Board, the Open Meetings Act prohibits two Board
members from speaking to each other without convening an official
meeting of the Board. Also, the small size of the Board results in
many decisions being made by only three people. Since Board
membership was reduced to only five members, more than 40 percent of
the Board's decisions have been made with only three members voting.
This is due to both absences and recusals, but is indicative of the
difficulty the Board has in operating properly.
2. Reinstate categorical membership to
the Board (one physician, one hospital representative, one nursing
representative, one nursing home representative, one representative
with health-care financing expertise).
Categorical representation gives the
Board something that it currently lacks: experience. Categorical
representation was done away with as a result of the corruption in
the Board (P.A. 93-889), yet it was not the categorical
members of the Board who were accused of wrongdoing. The Board
members who were involved in scandal were appointed to the Board as
consumer members, not representing any specific health-care
interest. Reinstating categorical membership will ensure that the
views of every health-care entity governed by the Board are
represented on the Board.
3. Reduce Board membership
restrictions (relative ties to health-care industry should not
preclude service on the Board).
Currently, a prospective Board member
is ineligible to serve if a spouse, son, daughter or close relative
works in the health-care industry in Illinois, regardless of what
that position may be. This provision unnecessarily reduces the pool
of qualified Board members.
4. Extend Board Sunset Date to June
30, 2011.
Persons who testified before the Task
Force believed that the short sunset date of April 1, 2007,
adversely impacted the Board's ability to recruit and retain key
professional staff. Experienced and competent staff is vital to the
operations of the Board and, ultimately, the health care of millions
of Illinoisans. Continually threatening the existence of the Board
without calling for a review of the Board's viability has
unnecessarily hamstrung the Board's ability to recruit and retain
vital staff. The five-year sunset date, combined with the
legislative review panel, will enable the Board to fill key staff
positions necessary for making informed and proper decisions.
5. Exempt the Illinois Health
Facilities Planning Fund from Section 8(h) of the Illinois State
Finance Act (fund chargeback authority).
To date, the Governor has moved more
than $3 million from the Illinois Health Facilities Planning Fund
into the General Revenue Fund. At the same time, the Board has
consistently lapsed almost 30 percent (more than $500,000) of its
annual appropriation. It is unreasonable to take resources from an
entity that has obvious staffing needs for the purpose of the
general budget. Enabling the Board to retain the resources it
generates and spend those resources on crucial operations will
strengthen the review process and produce better results for both
health-care providers and health-care consumers.
PREPARE FOR THE FUTURE
Convene a Task Force of the General
Assembly to examine and report on future recommendations concerning
the Board.
The role of the Board has
consistently been a topic of debate within the General Assembly. But
the General Assembly has never completed a comprehensive evaluation
of the Board and its role in health care since the inception of the
Board. For this reason, the Senate Republican Health Facilities
Planning Board Task Force is calling on the General Assembly to
convene a Task Force for the purpose of conducting a thorough and
complete evaluation of the long-term viability of both the Board and
the certificate-of-need process. This panel will be made up of two
members from each legislative caucus and the five new categorical
members of the Board. The evaluation will be completed by March 1,
2009.
BOARD HISTORY
Health facilities planning boards
were created in the mid-1960s in an attempt to control escalating
health-care costs. The theory was that high construction costs lead
to increased health-care costs. The creation of health facility
planning bodies was mandated by Congress in 1974. But the ability of
a health facility planning entity to control or curtail health-care
costs is in question. In 1986, Congress repealed the federal law
mandating health facilities planning bodies. The federal government
has gone as far as to declare that certificate-of-need programs are
actually counter-productive. An often-cited Federal Trade Commission
report concluded that the certificate-of-need process does nothing
to control health-care costs and can actually foster health-care
cost inflation by encouraging non-competitive business practices.
The Illinois Health Facilities
Planning Act was adopted in 1974 to comply with the federal mandate.
Since that time, the Illinois Health Facilities Planning Board has
been the source of much debate. The most significant challenge to
the Board's existence came in 2000 when the Senate Republican Caucus
pushed legislation that severely curtailed the influence of the
Board in health facility decisions. The certificate-of-need process
has drastically changed since the creation of the Board in 1974, but
still needs a comprehensive review of its overall scope and
effectiveness. Of the 36 states that still have a
certificate-of-need program, Illinois is considered to have a less
restrictive certificate-of-need process with high capital thresholds
and a limited number of fields that require Board review.
The controversy of the Board's
existence, however, has not diminished. Despite the political
scandal that plagued the Board just a couple of years ago and the
political controversy of the suspiciously short sunset date, the
main question of the necessity of the Board's existence is still
central to the debate.
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