MMHA 6451 Week 3 Policy Topic Selection Memo Example

Memorandum

To: Vice President, Government Relations, Cobalt River Health

From: Policy Analyst (MMHA student)

Date: Month Day, Year

Re: Request to proceed: a term-long analysis of the certificate of need repeal bill for ambulatory surgery centers

Decision Requested

I request approval to spend this planning year analyzing Senate Bill 214, which would repeal the state's certificate of need (CON) review for new ambulatory surgery centers. This memo explains why the bill was chosen over two other candidates, describes the problem it addresses using three public data sources, and sets out the installments that will follow.

Why This Topic

Three candidates were considered: the CON repeal bill, a proposal to expand the state's Medicaid dental benefit for adults, and a federal proposal to change the 340B drug discount program. Each was tested on two questions: will a decision fall due within the planning year, and can Cobalt River influence it? The dental proposal has no bill this session and would affect the system only modestly. The 340B proposal matters a great deal to the system's finances, but the decision rests with Congress and federal agencies, where a three-hospital system has little voice. The CON bill passes both tests. It has been filed and assigned to the Senate Health and Human Services Committee, which expects to hear it this session, and the system's hospitals are among the state's larger providers of outpatient surgery, so legislators will expect to hear from them.

CON programs require providers to obtain state approval before opening certain facilities or making major capital investments. A majority of states still operate some form of CON, though they differ widely in which services they cover (National Conference of State Legislatures, 2024). Evidence on whether CON controls spending is mixed: an early national study found no surge in spending after states removed CON, but also little evidence that CON had restrained it (Conover & Sloan, 1998). That uncertainty makes the bill a real question rather than a foregone one.

The Problem in Three Counts

Count 1: How many ambulatory surgery centers the state has. The CMS Provider of Services file lists Medicare-certified facilities by type and location (Centers for Medicare & Medicaid Services, 2024). For this analysis, an illustrative count of 38 certified centers will be used, concentrated in the two largest metropolitan areas, with 9 of the state's 60 nonmetropolitan counties home to any center at all. The file's blind spot is that it lists only Medicare-certified centers. A center that treats only commercially insured patients may not appear, so the count is a floor.

Count 2: Where outpatient surgery happens. AHRQ's Healthcare Cost and Utilization Project assembles state ambulatory surgery and services databases that record outpatient surgical encounters by setting, where a state participates (Agency for Healthcare Research and Quality, 2024). An illustrative split of 62% of outpatient surgery in hospital departments and 38% in freestanding centers will be used. The blind spot is coverage: not every state submits every setting, and freestanding center reporting is often less complete than hospital reporting, so the hospital share may be overstated.

Count 3: How the CON program has actually decided. The state health planning agency publishes its decisions on CON applications. An illustrative review of the last five years shows 14 applications for new surgery centers, 9 approved, 3 denied and 2 withdrawn. The blind spot here is the applications never filed. A program that discourages applications through cost and delay will show a high approval rate among those who apply, which can make it look less restrictive than it is.

What the Analysis Will Lead To

The analysis will follow a standard policy analysis sequence: define the problem, construct alternatives, select criteria, project outcomes and confront trade-offs (Bardach & Patashnik, 2020). Installments will be delivered as follows: evaluation criteria in Week 4; the problem statement and options in Week 5; a stakeholder impact table in Week 7; a scoring matrix in Week 8; a feasibility review in Week 9; a defended recommendation in Week 10; and a legislative brief with the full analysis attached in Week 11. Each installment will distinguish what serves the public from what serves Cobalt River, since the committee will ask about both.

Limits and Conflicts

Two limits should be stated now. First, Cobalt River has a direct financial interest in the bill: its hospitals perform a large share of the state's outpatient surgery, and new freestanding centers would compete for those cases. The analysis will report the system's own exposure separately and will not let it set the public criteria, so that the final recommendation can be defended to legislators who know the system's position. Second, the data described above are partial. Commercial-only centers, incomplete ambulatory reporting and unfiled applications all limit what the counts can show, and the analysis will treat them as estimates rather than facts. If better data become available, such as all-payer claims for outpatient surgery, the problem statement will be revised before the options are scored. I would also recommend that the analysis be shared in draft with the system's surgeons, several of whom may favor repeal, so that their perspective is represented before the system takes a position.

References

Agency for Healthcare Research and Quality. (2024). HCUP State Ambulatory Surgery and Services Databases (SASD). Healthcare Cost and Utilization Project.

Bardach, E., & Patashnik, E. M. (2020). A practical guide for policy analysis: The eightfold path to more effective problem solving (6th ed.). CQ Press.

Centers for Medicare & Medicaid Services. (2024). Provider of Services file: Hospital and non-hospital facilities [Data set]. U.S. Department of Health and Human Services.

Conover, C. J., & Sloan, F. A. (1998). Does removing certificate-of-need regulations lead to a surge in health care spending? Journal of Health Politics, Policy and Law, 23(3), 455-481. https://doi.org/10.1215/03616878-23-3-455

National Conference of State Legislatures. (2024). Certificate of need state laws. National Conference of State Legislatures.