Health Care

Michigan Lawmakers Overturn a Bad Regulation Restricting Access to Cancer Treatments

They should scrap other Certificate of Need laws too.


An anti-competitive regulation would have restricted access to a promising new cancer treatment in Michigan. Fortunately, the rule has been wiped off the books. But its near-adoption stands as a warning about how hospitals can use the government to protect profits at the expense of patients.

In September, Michigan's Certificate of Need Commission voted to impose extra accreditation requirements on health care providers that offer immunotherapy cancer treatments—including CAR T-cell treatments, a particularly promising approach that works by bio-engineering the body's immune system to equip blood cells with new Chimeric Antigen Receptors to target cancer cells. Those treatments have become an increasingly attractive way to combat cancer alongside more traditional methods, such as surgery, chemotherapy, and radiation.

Under the rules passed by the state commission, hospitals wanting to offer CAR T-cell treatments and other, similar therapies would have had to obtain additional third-party certifications. The additional certifications would have effectively prohibited many smaller hospitals and clinics from offering this potentially revolutionary treatment.

"Some patients will not have the resources to travel to a major academic medical center and thereby will be excluded from the potential benefits of this life-saving therapy," James Essell, cellular therapy chair of the U.S. Oncology Network, told the commission before it went ahead and adopted the new rules anyway. Similar objections were raised by a variety of cancer research organizations, doctors, pharmaceutical companies, and patient advocates. The American Cancer Society warned that the new regulations meant some patients "may not be offered CAR T-cell treatment or new cellular therapies in the future, or may experience significant health decline or death before they could identify a facility and gain access."

But the commission sided with several large hospital chains, including the University of Michigan Health System, the state's largest hospital system, in unanimously adopting the new rules.

On October 30, both chambers of the Michigan legislature approved a resolution scrapping the rules. A 2002 reform to the state's Certificate of Need laws let them block the regulations from taking effect.

"We would have been the only state in the nation to require additional state-level government oversight of this procedure," said Sen. Curt VanderWall (R–Ludington), who sponsored the Senate version of the disapproval resolution blocking the new rules. "Michigan does not need to add another layer of government bureaucracy at the state level; the current safeguards are more than enough."

Indeed, these regulations were never really about patient safety at all.

In 2017, the Food and Drug Administration (FDA) approved two CAR T-cell therapies for children suffering from leukemia and for adults with advanced lymphoma. In August, the Centers for Medicare and Medicare Services specifically said the type of certification imposed by the Michigan CON commission was not necessary for hospitals to offer CAR-T cell therapy. Instead, the agency recommended a different third-party certification, one that is already required for all hospitals in Michigan.

And while CAR-T therapy is still being developed and other uses of T-cell therapies are yet to be approved by the FDA, the Michigan CON Commission does not do medical testing. Like similar agencies in other states, the extent of its mandate is purely economic, not medical. Though the specific applications of CON laws differ from state to state, their stated purpose is to prevent overinvestment and keep hospitals from having to charge higher prices to make up for unnecessary outlays of capital costs.

"Do we really want unregulated access where let's say 100 hospitals can each treat like three patients? No," Greg Yanik, an Ann Arbor–based oncologist who favored the new regulations, told Crain's Business Journal earlier this month.

Depending on the state, everything from the number of hospital beds to the installation of a new MRI machine could be subject to CON review. And the boards themselves are often subject to regulatory capture and become subject to the influence of large hospital chains or other special interests.

"The attempt to regulate promising new cancer treatment in Michigan proves how easy it is for a Certificate of Need board to extend political power at the expense of patients," says Anna Parsons, a policy coordinator with the American Legislative Exchange Council.

Patients ultimately lose. In 2016, researchers at the Mercatus Center at George Mason University found that hospitals in states with CON laws have higher mortality rates than hospitals in non-CON states. The average 30-day mortality rate for patients with pneumonia, heart failure, and heart attacks in states with CON laws is between 2.5 percent and 5 percent higher even after demographic factors are taken out of the equation.

Parsons says state lawmakers should repeal the state's CON law entirely to prevent other needless regulations in the future. For now, thankfully, state lawmakers did their duty to prevent a potentially disastrous regulation from blocking access to these promising cancer treatments.

Innovative immunotherapy treatments are "bringing patients back from the brink of death and giving them a new chance at life," says Vanderwall. "A chance that shouldn't be taken away by bureaucratic hurdles and unnecessary regulations."

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  1. These Certificates of Need are a perfect encapsulation of socialist thinking. Rather than let investors lose money, and especially rather than admit that’s how markets and capitalism work their genius, they have to pretend they know more than investors and markets.

    Nothing better illustrates the foibles of central planning. Their best excuse is laid open by simple illustration.

    1. What I mean by simple is buying medical equipment like this. It happens over and over. MRI machines, neo-natal intensive care wings, outpatient clinics.

      Central planners: “Our projections show this new (equipment, wing, clinic) won’t be full and therefore will be a cost unmet by revenue and require subsidies from other patients and yada yada yada.”

      Investors: “We have investigated it better than you ever could because it is our fucking money at stake, which means we care a lot more than you do to get it right. We also see existing patients every day and we know how busy our current (machine, wing, clinic) is and how many patients our new (machine, wing, clinic) would have while still leaving our old (machine, wing, clinic) at capacity.”

      1. Agreed. To add to that it is not just competition in terms of equipment and facilities. The real fight is for the handful of individuals with the knowledge and experience to run a program like this all of which is an ongoing clinical trial. The rest is just ‘stuff’.

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