A State of Reform analysis of State of Alaska Certificate of Need (CofN) applications shows a new trend by the State of Alaska to deny applications for Certificate of Need related to new health care facilities.
From 2008 to 2011, the State of Alaska approved 87.5% of all applications for a CofN. So far in 2012, the State has denied 67% of applications.
Moreover, of the last 4 applications going back to 2011, 3 of those applications were denied. One of those continues through an appeal process.
The CofN determinations make no reference to whether this is driven by a change in policy in the Parnell administration about new facilities, or whether this is purely a result of the process at work. The sample size is small, after all.
Notable successful applications for CofN in recent years include a replacement hospital in Wrangell, a major renovation of Bartlett in Juneau, and over 120,000 square feet in two applications for skilled nursing facilities in Anchorage.
The Certificate of Need program exists to limit supply of uncoordinated medical care facilities to levels considered appropriate for demand. In many markets, CofN can provide significant downward pressure on costs drivers, like utilization.
However, CofN programs across the country have faced criticism, with stakeholders claiming the process is about politics more than policy.