It is declared that, for the benefit of the people of the state and the improvement of their health, welfare, and living conditions, it is essential that hospitals within the state be provided with appropriate means at reasonable cost to maintain, expand, enlarge, and establish health care, hospitals, and other related facilities; that hospitals be provided with the ability to refinance indebtedness; and that authorities created or incorporated under this act be provided with the ability to refund or to refund in advance obligations of 1 or more of those authorities. This act shall provide a method to enable hospitals in the state to provide or maintain at reasonable cost pursuant to reasonable terms the facilities, structures and services needed to accomplish the purposes of this act, all to the public benefit and good, to the extent and manner provided in this act.

The state authority may lend money to hospitals for the acquisition, construction, improvement, or alteration of hospital facilities....

(e) "Hospital" means a nonpublic corporation, association, institution, or establishment located within the state for the care of the sick or wounded or of those who require medical treatment, operated without profit to an individual corporation or association. It includes nonprofit corporations or other organizations engaged solely in some phase of hospital activity or in providing a supporting service to hospitals or public corporations which operate or own hospital facilities.

(f) "Hospital facilities" means a building or structure suitable and intended for, or incidental or ancillary to, use by a hospital and includes outpatient clinics, laboratories, laundries, nurses', doctors', or interns' residences, administration buildings, facilities for research directly involved with hospital care, maintenance, storage or utility facilities, parking lots, and garages and all necessary, useful, or related equipment, furnishings, and appurtenances and all lands necessary or convenient as a site for the foregoing. Hospital facilities include an office facility not less than 80% of which is intended for lease to direct providers of health care, and which has been determined by the department of public health to meet a demonstrated need and to be geographically or functionally related to 1 or more other hospital facilities, if the authority which is issuing the bonds determines the financing of the office facility is necessary to accomplish the purposes and objectives of this act.

Before a state or local authority adopts a resolution authorizing the issuance of bonds or notes and as a condition precedent to the authority to issue the bonds or notes, a certificate of need shall be obtained pursuant to Act No. 256 of the Public Acts of 1972, as amended, being sections 331.451 to 331.462 of the Michigan Compiled Laws, or a determination shall be secured from the agency issuing the certificate of need that a certificate is not necessary for the project....

(1) Except as otherwise provided under this part, a person shall not do any of the following without first obtaining a certificate of need:

(a) Acquire or begin operation of a new health facility.

(b) Make a change in the bed capacity of a health facility.

(c) Initiate a new service.

(d) Acquire covered medical equipment.

(e) Make a covered capital expenditure.

(1) "Health facility", except as otherwise provided in subsection (2), means:

(a) A hospital licensed under part 215.

(b) A mental hospital, psychiatric hospital, or psychiatric unit licensed under the mental health code, Act No. 258 of the Public Acts of 1974, being sections 330.1001 to 330.2106 of the Michigan Compiled Laws.

(c) A nursing home licensed under part 217 or a hospital long-term care unit as defined in section 20106(6).

(d) A freestanding surgical outpatient facility licensed under part 208.

(e) A health maintenance organization licensed under part 210.

(4) "Hospice" means a health care program which provides a coordinated set of services rendered at home or in outpatient or institutional settings for individuals suffering from a disease or condition with a terminal prognosis.

(5) "Hospital" means a facility offering inpatient, overnight care, and services for observation, diagnosis, and active treatment of an individual with a medical, surgical, obstetric, chronic, or rehabilitative condition requiring the daily direction or supervision of a physician. The term does not include a hospital licensed or operated by the department of mental health.