333-545-0000 Purpose of Certificate of Need (1) ORS Chapter 442 establishes state planning for health services and facilities in light of the following findings and in furtherance of health planning policies of the state as established through legislative and executive agency action. The certificate of need program of the Public Health Division has as its purpose the achievement of reasonable access to quality health care, at a reasonable cost. Therefore, decisions regarding proposed new health services and facilities shall be made for reasons having to do with the most urgent community health needs in the various parts of the state. The burden of proof for need and viability shall be on the applicant, taking these legislative findings into account: (a) Many citizens are unable to pay for necessary health care, being covered neither by private insurance nor by publicly funded programs such as Medicare and Medicaid; (b) Health care costs are rising at rates which exceed substantially the general rate of inflation; (c) There is insufficient price competition in the delivery of health care services and therefore insufficient cost consciousness among providers, payors and consumers; (d) There are inadequate incentives for the use of less costly and more appropriate alternative levels of health care; (e) There is insufficient or inappropriate use of existing capacity; there are duplicated services; and there is failure to use less costly alternatives in meeting significant health needs; and (f) There are insufficient primary and emergency medical care services in medically underserved areas of the state. (2) In responding to the legislative findings listed in section (1) of this rule and to health planning policies of the state, the certificate of need program shall be administered with the goal of containing capital investment and the objectives of: (a) Promoting development of more effective methods of delivering health care; (b) Improving distribution of health care facilities and services; (c) Controlling increase of health care costs, including the promotion of improved competition between providers; (d) Promoting planning for health care services at the facility, regional and state levels; (e) Maximizing the use of existing health care facilities and services which represent the least costly and most appropriate levels of care; and (f) Minimizing the unnecessary duplication of health care facilities and services. (3) The division recognizes that: (a) The objective of reasonable access must be tempered by acknowledgment that decentralized services may not be safe, effective, or economical if utilization is below identified standards; (b) The objective of reasonable cost in any part of the state requires consideration of the actual and potential capacity of all facilities and services available or feasible to serve persons resident in that part of the state, so as to maximize the use of existing capacity, minimize unnecessary duplication, and give priority to the least costly alternatives feasible to meet significant health needs; (c) Realistically, price competition among providers of any given type of institutionally-based care is limited and may jeopardize quality, so that regulation of market entry through certificate of need, and maintenance of quality through strict licensure standards, is necessary; (d) Market competition between providers of institutional and alternative care contributes to the objective of reasonable access to quality health care at reasonable cost by reducing the likelihood of utilization of higher cost care when lower cost care would meet health needs, and should, therefore, be encouraged; (e) Public and private funds available for health care and related social services are limited by available revenues and by demand for other expenditures. Therefore, institutionally-based health care capacity should be regulated so that the proportions of available funds, whether publicly or privately paid, committed to less or more intensive service levels are determined by the balance of needs among the population to be served, rather than by pressure to fully utilize excess institutional capacity; (f) Health care regulatory, planning, and public and private reimbursement mechanisms should be coordinated so as to give incentives to providers to select the least costly treatment consistent with acceptable risk, and to give necessary care in the least costly setting; (g) Specific projects to modernize facilities at a particular facility do not necessarily contribute to the statewide objective of reasonable access to quality health care at a reasonable cost, and must be carefully reviewed against that standard. Statutory/Other Authority: ORS 431.120(6), 442.025 & 442.315 Statutes/Other Implemented: ORS 431.120(6), 442.025 & 442.315 History: OHD 11-1998, f. & cert. ef. 10-22-98 HD 13-1994, f. & cert. ef. 4-22-94