Haley’s reckless CON madness gets madder by the minute

When we last looked at the matter, Nikki Haley had vetoed funding for the certificate of need process that state law requires before new health facilities can be built and operate — leaving DHEC with an unfunded mandate, and SC hospitals in limbo on major plans.

Her action exhibited a blithe destructiveness across a wide spectrum, from public health policy through economic development.

And the stupid House failed to override her.

Today, it all got crazier:

S.C. hospitals, nursing homes and physicians can go ahead with plans for expansion or adding services without state approval after a program was not funded next year.

The S.C. Department of Health and Environmental Control will suspend the Certificate of Need program on Monday, agency director Catherine Templeton said in a letter.

The state House upheld a veto by Gov. Nikki Haley over $1.7 million in funding for the program this week.

“DHEC has no independent authority to expend state funds for Certificate of Need, and therefore, the veto completely suspends the program for the upcoming fiscal year,” Templeton said.

The agency will not take action against any work done while the program is suspended unless told to do so by the General Assembly, Templeton said…

Wow. So… hospitals are just supposed to go ahead with multi-million-dollar projects without going through the approval process that the law still requires, funding or no funding, and not worry about any future legal ramifications? Really?

Then this afternoon, this release came out:

Chairman Brian White and Representative Murrell Smith of the House Ways and Means Committee Issue a Statement Regarding  Governor Haley’s Certificate of Need (CON) Veto



(Columbia, SC) – On Wednesday, June 26, 2013, the South Carolina House of Representatives sustained Governor Haley’s budget veto number twenty by a vote of 56-65.  The effect of this veto reduced general fund support for the Department of Health and Environmental Control’s Certificate of Need (CON) Program by over $1.4 million.


“The House of Representatives did not intend to eliminate the CON Program or its statutory requirements.  In fact, the House believes there are a number of ways for the CON Program to retain its function and purpose. The Governor has the sole power to appoint DHEC’s governing board and is ultimately charged with enforcing the CON law. If the Governor and the agency director wish to unilaterally discontinue the program, as they have indicated, then that is a decision that lies exclusively within the executive branch and one which may be contrary to law but is certainly contrary to the will and intent of the House of Representatives.”



# # #

OK, that release is really badly worded, especially that last sentence. But what the lawmakers appear to be saying is that even though they went along with cutting the funding, they had NOT meant for DHEC to ignore the law — they had meant for it to find the money somewhere to continue the program. Which, of course, was grossly irresponsible on the part of lawmakers — they should have overridden. One of the least defensible dodges of irresponsible legislators is the old “Oh, find the money somewhere” gag. When, you know, they’re the ones who decide what gets funded and what doesn’t.

This is some bad craziness, people. I would think that Ms. Templeton were doing this outrageous thing as a protest of the governor’s irresponsibility, if she weren’t like, you know, the gov’s protege.

The only thing I can think of to fix this problem is the same thing that Joel Lourie is suggesting — that the General Assembly should go back into session to fix the problem and appropriate the funding for the program.

It’s a lot of trouble to go to, but this is a serious matter. One knowledgeable observer (which means, “someone who understands the world a lot better than our governor does”) said to me today, “I suspect there’s going to be a very interesting lawsuit here.”

Hey, more than just one. I can see hospitals suing each other, subcontractors suing contractors when work is started then halted, just a free-for-all.

This is amazing.

44 thoughts on “Haley’s reckless CON madness gets madder by the minute

    1. Kathryn Fenner

      Looks like it!

      Everyone seems to think there is unlimited “waste” in government that can be magically spun into gold!

  1. Mark Stewart

    On the other hand, we can be fairly certain that the legislature will not likely sustain future vetoes Haley may make if her intent was to make law through an absence of funding. Tactically, this was a short-sighted ploy. Strategically, this was a self-inflicted disaster for the Governor.

    This seems to be the m.o. of Haley’s administrations. So I guess we can probably say these kinds of ill-considered moves reflect her character most of all.

  2. Doug Ross

    One thing to consider is that there is a chance (growing larger every day) that Haley will bail on re-election and make the leap to Fox News while her national reputation remains higher with people who don’t know her. I’d put that at 50-50 likelihood right now.

    And that would be a bad thing for Vincent Sheheen because all his targeting of Haley over the years ends up as wasted effort. He won’t beat a traditional Republican candidate… because that candidate can also run against Haley’s record. That leaves Sheheen with one thing to run on – more spending on useless 4K education.

  3. Kathryn Fenner

    Useless 4K education? In a state with so many parents who cannot provide an enriching environment, so the poor get poorer, because they start school so far behind?

        1. Kathryn Fenner

          But First Steps says it isn’t about school readiness, which the report says it not a defined term.

          1. Doug Ross

            The statute may not define but First Steps does – from the audit:

            “S.C. First Steps defines school readiness as relating to multiple factors,
            including cognition and general knowledge; communication skills;
            approaches to learning, such as curiosity and independence; emotional wellbeing and social competence; and health and physical development.”

            There is little evidence that they have had any significant impact. How was it that kindergarten was once optional and now we have mandatory kindergarten and 4 year old programs yet the end result doesn’t change?

            You can’t fix broken homes and bad parents simply by putting four year olds into a program. Better to get the PARENTS into a program.

        2. Scout

          “Audit of First Steps:


          “The percentages of children at-risk for not being ready to succeed in school have not decreased since 2000.” ” – Doug

          This is true, Doug, but it wasn’t expected to reduce the risk factors. It was expected to improve the outcomes of student’s who have these risk factors, but the risk factors themselves are not things that First Steps programs can address. It’s true that First Steps did not adequately measure outcomes for the children it served, but that is a whole different question and doesn’t indicate the program is a failure – just that we don’t have the data to know.

          These are the risk factors in question, from the report at your cited link: Abuse and Neglect, Foster Care, Low Maternal Education (less than 12th grade), Temporary Assistance to Needy Families (0-5), Very Low Birth Weight and Low Birth Weight
          (Less than 2500 grams or 5.5 pounds), Teen Mother (Aged 15-19), Food Stamps (0-5)

          Those are things that are just facts for these children. If your mom was 14 when she had you, that will always be true, whether or not you received services from First Steps.

          The report also stated that the fact that children with risk factors has not decreased was not a criticism of the First Steps Program’s efficacy but was cited to show continued need for the program.

          From the report: “We reviewed South Carolina demographic data relevant to a child’s readiness for school, and found that the percentages of South Carolina children at risk
          for not being ready to succeed in school have not decreased since 2000. Though reduction in these numbers would be a long-term outcome of the state’s various programs designed to improve the well-being of South Carolinians, including S.C. First Steps, movement in one direction or another should not be attributed to S.C. First Steps. S.C. First Steps’ goal is not to reduce the incidence of these risk factor
          s, but to reach the children who have them. This information is presented to
          show that the need for statewide programming that addresses school readiness remains today.”

          The report said that First Steps did not do a good job of collecting data showing efficacy for outcomes of these children. That does not mean the program is a failure. It means that we just don’t have the data to know either way right now. But I can tell you from first hand experience that children with these risk factors who receive 4k and/or headstart (when they are 3) enter 5k with more skills in the domains addressed than kids with risk factors who come to 5k having only been at home before entering school.

          You also stated that we have mandatory 5k and 4k now. That is not true. 4k is not mandatory. I wish it was. Most places (not affected by the expansion) have funding for one 4k teacher who can do 2 half day sessions serving 20 children each session – with priority given to children with these risk factors – so 40 of the neediest children are reached, but there is always a waiting list. It is not enough, and it is not mandatory. If parents of kids with these risk factors don’t bother to register their kids for 4k, they can sit at home until 5k – nobody goes to find them. It is not mandatory. (That’s how I know when I meet them in 5k, that 4k and headstart make a difference – there are always some controls who have just been hanging out at home to compare them to – because 4k is not mandatory.)

          This expansion of 4k is a step in the right direction, but it is not enough. The expansion is based on poverty level of school districts as a whole so more affluent districts like Aiken, which has one district for the whole county, but nevertheless has quite a few poor outlying communities, will not receive additional 4k classes for their rural high poverty schools even though these communities may abut smaller districts with the same or even lesser amounts of poverty, but who do qualify for more 4k classes – since they are smaller community based districts whose poverty level by district is more representative (i.e. lexington 3).

          4k is not babysitting. Babysitting does not denote any kind of interaction with the child necessarily.

          4k involves curriculum based interactions and literacy exposure to develop communication, cognitive, social emotional, motor skills, and pre-literacy skills.

          1. Doug Ross

            Why not 3K or 2K “school”, too, then?

            I don’t believe it provides a measurable return on investment because it can’t overcome the risk factors that truly matter for successful outcomes (high school graduation rates). All the other statistics are meaningless unless a diploma is attained.

            I have an actual plan that would increase high school graduation rates dramatically in five years. Pay a bonus of $10,000 to the parent(s) of each graduate and $5,000 to the student. Not scholarships given to schools… direct payments to parents and students. Pay another $5,000 to each student who graduates from a state college (two year or four year).

            Money motivates people to do things they might not do otherwise.

  4. Kathryn Fenner

    3K or 2K would be awesome, if we would adequately fund it! I went to 3K and I have awesomely fit parents. A lot of kids like me do. Again, at risk kids are at a disadvantage…one we could fix, if we wanted to.

    1. Barry

      “I went to 3K and I have awesomely fit parents”

      You are more likely a success because of your parents- not 3k.

      3k is great- if responsible parents are involved in the child’s life. 3k isn’t so great (compared to a kid that doesn’t go) if the parents don’t care much anyway.

      1. Kathryn Fenner

        My point was that even back in the dark ages, in a small town in this very state, middle class kids went to 3K. It isn’t the weirdo option Doug suggested it was. I didn’t probably get much out of it, but so many kids really benefit from it. I am an outlier, anyway. Kids closer to the mean benefit from a leg up….or don’t.

  5. Kathryn Fenner

    You can probably never fully right the disadvantage some kids have from birth: poorly educated, overworked or just unengaged parent(s). If your mother has a college education, you start out with such a huge head start. We cannot fix that, level that playing field…..but we can do our best. We can smooth out the field a bit with early childhood intervention and education!

    1. Doug Ross

      Dreamland… you can’t fix kids unless you fix parents. It’s a cycle that continues to repeat itself over and over.

      Maybe if our community and political leaders would speak about the actual problem – unwed parents having children they can’t care for – we’d see some change.

      You want to treat the symptoms instead of the disease.

        1. Doug Ross

          On a case by case basis, sure. But not at a level to justify the expenditure of millions of dollars. We need to endorse all options (yes, those scary vouchers) to give as many people possible the opportunity to help kids. The government NEEDS competition to do better.

        2. Silence

          Yes, NC tried to fix kids, especially mentally defective ones. It didn’t work out well for them, and there are still lawuits ongoing.

  6. Brad Warthen Post author

    Well, the really depressing thing is that I’ve read repeatedly that kids develop their intellectual capacity by age 3. After that, their brains are formed and they’re as intelligent as they’re going to get.

    Now that doesn’t mean that a good education won’t help a child of average or even above average function at his or her maximum capacity, and thereby surpass a lot of smarter slackers.

    But it means there’s a ceiling. And that depresses me. Or maybe I’m just not smart enough to understand the science, and it’s OK…

    1. Scout

      There is a good bit of research now that suggests that early brain pathways develop based on level of input and stimulation received very early on. Some research suggests that for some pathways there is a limited window for development and if the proper stimulation is not received in that time period, those pathways just don’t develop. Auditory processing and emotional systems seem to follow this model – which is why for example if you are going to give a deaf kid a cochlear implant they need to have it by 3 for the brain to be able to develop to know what to do with the input from it, and also why early ear infections that cause intermittent hearing loss during developmental periods seem correlated with learning disabilities that don’t become apparent until later that affect ability to sound out/decode words for reading. (Get your kids tubes, people – they need to hear). And kids in orphanages/ cases of severe neglect who don’t get consistent emotional relating experiences with a consistent caregiver early on are at risk for developing reactive attachment disorder – where they seem to not be able to process emotion in the same way and form appropriate attachments if they miss that early input.

      That being said, one thing I’ve also learned from personal experience is there are exceptions to everything and it is never too late to try and help. Soon as you think you know something that is always true, you meet somebody that works completely differently. Everybody is an individual and you have to find out what works and what doesn’t work for each individual kid.

      I think the most important thing about this early input and stimulation is that it needs to be interactive with a real human being to really stimulate learning and development. It’s not just any input (i.e. mindless babysitting or sitting in front of a TV) but relevant input that makes the difference. Babies are wired to learn from adults who follow their lead and provide input about what the baby is paying attention to at that moment. That is why it would help to have trained skilled childcare as early as possible rather than just “babysitting” or “daycare” with untrained workers. So yea, Doug – 2k and 3k would be good. Headstart does start at age 3 and it helps.

      1. Doug Ross

        But let’s remember that in a classroom setting, how much actual individual attention is a 4 year old getting to help him/her improve all those cognitive areas? Minutes per week?

        And then they go home to parents who don’t care to help them develop. They spend 3/4 of their time in that environment.

        We can’t pay for an individual teacher/role model for each student at risk.

        1. Scout

          It’s not really quite that simple as “And then they go home to parents who don’t care to help them develop.”

          Honestly most parents do care about their children and want them to develop. It is insulting to think otherwise. In spite of that, there are a lot of factors that come into play and complicate things in poverty. Parents living in poverty may be working multiple jobs and not have the luxury to spend a lot of quality time with their children; kids are often shuffled about between various family members or neighbors or who knows who with not a lot of continuity and daily structure. The people who parents have to depend on for childcare may or may not have the same level of commitment to their child’s development that the parent would. Also homes typically don’t have a lot of books or literacy modeling going on. As Kathryn pointed out, having a mother with a college education makes a difference, for example, in language and vocabulary development and exposure. This doesn’t mean that parents living in poverty don’t want their children to develop, but they are not going to be able to impart the same level of vocabulary skills or general knowledge, for that matter, to their children if they start out with less sophisticated vocabularies themselves. In addition to that, I feel that there are differences in cultural practices in the way adults talk to children between poverty and middle class settings that make a difference in language development. Once again, that doesn’t mean these parents don’t love and care about their children – they do what they know, which is what they’ve been exposed to themselves.

          So what does 4k give these children – exposure to higher level vocabulary, exposure to books and literacy models, exposure to resources and experiences that they aren’t likely to have at home, structure and routine, and yes, quality interactions with adults paying attention to them. In a class of 20 kids with a teacher and an aide, that is an adult/child ratio of 1 – 10. It does make a difference. It just does.

          1. Kathryn Fenner

            I fear Doug just wants to write off these kids….

            Doug, what is your solution to poor kids from poor parents?

          2. Doug Ross

            There is no “solution”. Individuals will succeed of their own efforts. You can’t change that key factor no matter how much you give them.

            I offered my alternative. Bribe parents to keep their kids in school. Pay them cash money for getting a child to graduate. $10K for a diploma. Maybe other cash awards for attendance, reading above grade level.

            Money motivates far better than government programs.

  7. Kathryn Fenner

    Scout knows from extensive personal experience that these 4K programs do help. They don’t cure the problem, which can only ever be managed. All the kids don’t get to be above average, ever, and most go on to be parents anyway.

    Quality infant and child care services could really make an even bigger difference. Early intervention and all, but that would be too much like what works so well in Northern Europe and we know those people are just Commies lite.

    1. Doug Ross

      It would be better to have a society that strongly communicates the message to pre-teens that having children out of wedlock before you graduate high school is almost certainly a path to poverty. We need to make the baby daddies who are fathering multiple kids by multiple women feel some sense of shame (obviously they don’t feel any sense of responsibility).

      I’d like to see Vincent Sheheen address THAT issue.

      1. Doug Ross

        If we want Scandinavian education, child care, and health care, we will need their military as well.

        We can’t have it all. We have a President now who puts military over social programs.

        1. Bryan Caskey

          We might also need their small and relatively homogenous population. If we decide to enact Scandinavian type government, can we at least import some of the blonde-haired, blue eyed women they have? (Asking for a friend.)

  8. Bryan Caskey

    Getting back to the OP, what is the point of the Certificate of Need program? I’m asking this as a question-question, not a rhetorical question.

    As I understand it, if a hospital (like Lexington Medical Center for instance) wants to expand their facilities to include a heart program, they have to first get permission from the State of South Carolina (DHEC) to do so.

    Why? What benefit is there to limiting what services hospitals can provide? We don’t do this with other industries. The State doesn’t limit when and how lawyers can expand their practice (although Juan would probably like that). The State doesn’t limit the amount of burger joints opening on Devine Street.

    Am I crazy, or should the free market and individual hospitals be allowed to determine for themselves what services they should and shouldn’t provide?

    Having said all that, it seems silly to defund a department (which is what my understanding of the situation is) but still have the purpose of that department enshrined in the law. It seems like the CON law needs to be repealed and the department closed, or the law needs to be enforced, and the department funded.

    It seems like we’re getting into that murky area where the Executive Branch is starting to pick and choose what laws it wants to enforce. Sound familiar to anyone? I don’t like that the Federal executive branch picks and chooses what laws to enforce at a whim. Immigration and now the ACA.

    The employer mandate requirement of the ACA is now being “delayed” until 2015. How is this legal? The ACA (the law of the land) clearly says it should be in effect, but the Executive Branch has simply decided to ignore the law in this instance. How is this possible?

    For all of you who think this is such a great policy move – be careful. It’s bad precedent for the President to just decide to ignore certain laws. What if the Administration said that they were going to delay enforcement of the the federal law against drugs until 2015…

    Anyway, lots of questions here.

    1. Silence

      Bryan, as I understand it, the original point of the CON program was to maintain quality, or to ensure quality in the surgical programs that exist in SC. If you are going to have a particular surgery, say open heart surgery, you’d probably want to go to a surgeon who does a bunch of them, not a guy that does one or two a year. Having a CON program is an attempt to make sure that the hospitals, surgeons and staffs are all up to speed and in practice for performing a particular service. This should also ensure that equipment is utilized optimally, and that hospitals don’t make investments in suites or equipment that is rarely used.

      Put another way: If there are 100 cases requiring a particular operation in the state every year, it would be better to have two hospitals that each did one operation a week than it would to have 50 hospitals that each did two operations a year.

      Couple that with the fact that we invest a significant amount of public funding in our hospitals. I wouldn’t want each podunk town in SC to get an advanced surgical suite just because some powerful state senator wrote an appropriation for it. You’d get the “Jakie Knotts Cardiovascular Surgical Center” in Lexington, the “Darrell Jackson Brain Surgery Center” at the Eastover Medical Center, the “Gerald Malloy Lung Transplant Center” in Marlboro, and “Clementa C. Pinckney Spinal Surgery Center” in Allendale. We couldn’t support them all!

      I’m not defending the CON program, or even saying that it works. I’m a fan of free enterprise, and of limited government regulation. I like competition. I also like competent medical care, though. Mostly I’m just explaining the rationale behind the program, not neccessarily agreeing with it.

      1. Doug Ross

        I agree with Bryan for a couple reasons:

        1) How do we bring down healthcare costs when there are certain artificial monopolies that exist to limit the supply of options for the public?

        2) There is zero chance that a new heart center would open with inexperienced surgeons. And with changing technology, there will always be some new technique or medical device that will have to be tried for the first time. Who’s to say that there isn’t a better young heart surgeon out there who isn’t stuck in a particular mindset when it comes to treatment?

        3) As far as I can tell from my own family’s experience with dealing with heart surgeons in this area, they aren’t sitting around waiting for patients. I recall several multi-hour waiting room experiences a few years ago. Could there be some slight improvement in outcomes if wait times are decreased?

        Removing regulations (unnecessary ones) spurs innovation and the economy.

      2. Brad Warthen Post author

        Silence has done a pretty good job of explaining why we have CON — and why we need it (even though he doesn’t want to go there).

        And it’s not just a matter of having a qualified heart surgeon. Any hospital desperate to have an open-heart program (which these days are extremely lucrative for the hospitals) can go out and hire one. But you also need a team working with that surgeon that is highly experienced in working together, to get the best results.

        If I recall correctly (and it’s been awhile since I’ve looked into this), the number of procedures you want a team to do, to reach and maintain the proper level of competence, is in the hundreds.

        Once, only Providence did open-heart surgery in this area (and I think at one time, they may have been the only one in the state). In terms of developing the expertise and track record, they got way, way out ahead of anyone else wanting to do this. To this day, the Providence program is scored at the highest level nationally.

        When Providence started doing this, it was expensive and risky to set up. Other hospitals weren’t interested. But Providence did it because the sisters saw the need.

        In recent years, open-heart surgery has become a big profit center for hospitals with such programs, helping them defray costs from other, less lucrative forms of care. So everybody started wanting in on the action.

        The purpose of CON is to make sure we don’t have a multitude of programs, with none of them doing enough to be good at it. (Particularly since the number of bypasses needed has sort of peaked, with other therapies coming online to make them less necessary.)

        This is really a good argument against looking at the world ideologically. Open markets are great, for producing a variety of carbonated beverages. If you’re a good restaurant, it can actually help your business to be on a street with several other good restaurants — that is to say, in an area the public knows as a place where good restaurants are found. Competition can do all sorts of good things.

        But if you look at things pragmatically and not according to some rigid ideology, you see that there are areas where open competition is NOT the best thing. That’s where the CON process comes in.

        1. Doug Ross

          “The purpose of CON is to make sure we don’t have a multitude of programs, with none of them doing enough to be good at it. (Particularly since the number of bypasses needed has sort of peaked, with other therapies coming online to make them less necessary.)”

          But that is overstating the case. We aren’t talking about a “multitude” of programs. We are talking about one more.

          And, again, I believe that no hospital would attempt to set up a heart center without believing it can do it well (or even better than the other one). The startup costs, the liability, etc. is far too great to think they would just say “Hey, let’s see if we can do this!” I would expect they would hire experienced surgeons and staff…

          Are patients waiting for surgeries now? If so, what is the impact on a heart patient when he has to wait?

          1. Brad Warthen Post author

            To the best of my knowledge, no one is waiting for bypasses. No one was waiting back when Providence was the only program, either, if I recall correctly. Now, there are three programs in the Midlands.

            And in states where there is no CON process, you do find a “multitude” of open-heart programs, and their volume tends to drop below the acceptable level. Sorry I can’t cite numbers; it’s been years since I studied up on all this…

          2. Doug Ross

            Has the quality of service dropped? Has the price for bypass surgery dropped? Those are the key questions. If the results are the same and the prices is lower, that’s a good thing.

            There would have to be evidence that patient outcomes are worse to justify limiting the number of centers that are opened.

            Don’t you want cheaper healthcare? How else will you get it without increasing supply or reducing demand? With Obamacare, demand will increase and if the number of providers is the same, prices will go up.

    2. Doug Ross

      As for Obama pushing out the employer mandate a year, call me unsurprised. The administration pushed out most of the tough parts of Obamacare until after the 2012 election. Now that they see the handwriting on the wall regarding the employer mandate, they have to punt again to save face for the 2014 elections.

      Max Baucus was right – it’s going to be a train wreck. Anyone with any experience with the government knows that. We’re now talking four YEARS to get it done. YEARS! Just to change some regulations.

      I’m never surprised by the incompetence of government. And that’s because they have no incentive to do it right.

  9. Kathryn Fenner

    Health care, and particularly hospital care has not been “free market” for a very long time. We subsidize care, and need to ensure that we have the all the care we need, not just profitable care like cardiac.


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