Roper unveils MRI scanner at new offices (copy)

Among the 20 applications for new medical equipment sent to the state health department since 2014, eight were for MRI machines like this one, which Roper St. Francis purchased in 2013 for $2 million. File/Staff

Doctors’ groups pitted themselves against one of the Statehouse’s top-spending lobbies in an effort to dismantle laws that regulate their profession. And they lost.

The Charleston County Medical Society argued the regulations limit consumer choice. The S.C. Hospital Association countered that the rules governing the program, known as “certificate of need,” is important for keeping health care accessible for everyone.

While the two camps didn't come to an agreement, they have found some common ground on a lesser-known part of the law, one that regulates whether health care providers can spend millions of dollars on medical equipment.

Both groups agree that those rules might be too restrictive.

Hospitals view buying the newest devices as a way to offer the most cutting-edge treatments to patients. But if they want to spend more than $600,000, state law requires them to obtain permission from the S.C. Department of Health and Environmental Control.

The existing threshold may seem high. But it's no longer uncommon for a piece of medical equipment to exceed $1 million.

A new computerized tomography scanner can run $2 million, for instance. The da Vinci Surgical System, which enables doctors to perform robotic surgeries, costs even more.

Just since the beginning of last year, hospitals in South Carolina applied for a handful of medical devices totaling nearly $30 million. That figure in some cases appears to include the cost of upfitting the sites where the machines would be housed.

The program is often the setting for disputes between competing health systems, even over medical devices.

Trident Health, for example, challenged the Medical University of South Carolina’s request to spend almost $10 million on a piece of equipment that treats cancer patients with radiation. After about a year, a state Administrative Law Court judge ruled against MUSC, citing misrepresentations on its application to DHEC.

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Dr. Marcelo Hochman, president of the Charleston County Medical Society, said it is “unfortunate” companies need permission to invest money the way they see fit.

“It’s not just building a hospital,” Hochman said. “It’s very specific services that are included.”

Rep. Nancy Mace, R-Daniel Island, and Rep. Murrell Smith, R-Sumter, introduced a bill this year that would repeal the laws. This was not long after President Donald Trump's administration encouraged states to repeal or scale back the regulations, arguing they put needless restrictions on competition. All but 13 states have these laws in some form, according to the National Conference of State Legislatures

Florida repealed its law this year, a change that is expected to take effect this summer.

No one has challenged the rules in South Carolina in several years. Hochman said he believes deregulating the health care market would encourage physicians to open more independent practices and give consumers more choices.

When the legislation came up for discussion in the House of Representatives, about 30 hospital administrators were present to oppose the bill, Hochman said, while five physicians showed up to support the medical society's position.

Notably, representatives for MUSC spoke in favor. MUSC's competitors have often challenged its projects through the certificate of need program.

Up until now, the debate was mostly focused on whether health care companies should be required to seek permission from the state to build costly new hospitals and other facilities. 

Schipp Ames, spokesman for the S.C. Hospital Association, said the laws are needed as a check on overbuilding, ensuring a proper balance between the supply of services within an area and the demand. He added that the group also is looking out for rural hospitals, which might not be able to survive if a new deep-pocketed rival entered the market offering only the most profitable services.

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But the hospital association is open to changing some of the rules, including the one about medical devices.

"We just think that full repeal could create some access issues," Ames said. "We definitely want to modernize the act."

A spokesman for DHEC said in a statement that 20 applications have been sent to the agency for medical equipment since 2014. All have been approved or are pending, he said. 

When reviewing the projects, DHEC considers "distribution, financial feasibility, community need, and cost containment." 

Whether the two factions can find common ground on the medical equipment rules, or any other part of the law, remains to be seen.

Hochman said he has formed a nonprofit group, called the Coalition to Repeal CON, whose purpose is to lobby for a full repeal of the law.

Ames said a full repeal was the only proposal brought to the table this year, and it is one the hospital association cannot support.

Mace, who announced last week she's running for Congress, said her objective is to pass "100% full repeal," but acknowledged a compromise could be necessary. She said the current law is anti-competitive, inflating health care prices for customers. 

The bill should have a hearing in the House Ways & Means committee early next year, Mace said. Smith, the bill's co-sponsor, is chairman of the committee.

Reach Mary Katherine Wildeman at 843-937-5594. Follow her on Twitter @mkwildeman.