As now written, House Bill 337 would retain the certificate of need (CON) program for major health facilities in communities of 60,000 or less. The bill would require that independent health care facilities in communities with more than 60,000 be at least 50 percent owned by state-licensed physicians.

The bill also requires the state Department of Health and Social Services to do an independent study of the CON program. Committee chair Rep. Peggy Wilson, R-Wrangell, who supported the independent study, said she is reluctant to completely abandon the program without an assessment of the consequences.

The bill also establishes a health care commission and health care information office to provide information to consumers.

Palin’s bill to repeal the CON has emerged as one of the hottest issues of the session, with major health care providers and hospital groups engaged in intense lobbying against it, and groups of medical entrepreneurs, who want to build independent clinics and surgery centers to compete with hospitals.

Palin and supporters of the repeal argue that the CON, which is a permit for health facilities, stifles competition and preserves a monopoly for major health care providers.

Hospital operators, who oppose HB 337, say they are required to offer many kinds of marginal or money-losing services, such as emergency rooms, and need to retain profitable services to offset losses. Unfettered competition would allow competitors to eat away at that business, which could serious undercut the finances of community hospitals.