Tag Archives: CON laws

How Certificate Of Need Laws Endanger Americans

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The Federalist posted an article today about Certificate of Need (CON) laws and how they are hindering America’s response to the coronavirus.

The article reports:

During a Tuesday press conference, Cuomo lashed out at the federal government for not sending enough ventilators as the Wuhan coronavirus continues to rattle the state. “Four hundred ventilators? I need 30,000 ventilators,” Cuomo said. “You want a pat on the back for sending 400 ventilators?” The state is projecting it will need approximately 140,000 beds in 14 to 21 days, which is higher than its previous estimation of 110,000 beds by early to mid-May.

However, New York, along with 35 other states and the District of Columbia, have in place what are known as certificate-of-need (CON) laws. According to Reason, “Their stated purpose is to keep hospitals from overspending, and thus from having to charge higher prices to make up for unnecessary outlays of capital costs. But in practice, they mean hospitals must get a state agency’s permission before offering new services or installing a new medical technology. 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.”

The article notes the impact of CON laws on patient mortality rates:

In addition to causing a lack of proper equipment, these rules harm patients. According to a study by the Mercatus Center at George Mason University, states with CON laws have a 2.5 to 5 percent higher mortality rate than those without. Wait times have also been affected, with the average delay in New York City emergency rooms ranging from seven to 10 hours before the virus outbreak added strain to an already poorly operating medical system.

The article concludes:

Luckily, efforts to eradicate this onerous red tape have already begun, as South Carolina Gov. Henry McMaster issued an executive order suspending CON law enforcement in the state. Governors like Cuomo would be wise to follow suit and slash these burdensome regulations to allow for the expansion of new medical facilities and COVID-19 treatments.

More government control of our health-care industry is the exact opposite of what should be happening in Washington, D.C, and states around the country. Instead, lawmakers across the nation should be focusing on getting rid of these big-government barriers that make it more difficult for doctors and medical experts to treat patients. Letting the market solve its own problems is the answer to many of our problems in health care. The government needs to know when to step out of the way.

On March 23, I posted an article about how CON laws are impacting New Hampshire’s response to the coronavirus. Hopefully the problems caused by these laws during this health crisis will cause states to revisit them. Unfortunately, hospitals like the monopolies the laws give them and are willing to put forth massive lobbying efforts. Lawmakers need to rise above the politics and lobbyists and do what is best for the people they are supposed to represent.

When Regulations Interfere With Solutions

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Yesterday The Union Leader, a New Hampshire newspaper, posted an article about the possible shortages of medical supplies and hospital beds during the coronavirus epidemic.

The article notes:

ACROSS the country, state leaders have raised the alarm over the lack of enough beds should the COVID-19 pandemic create a surge in serious and critical cases. They are concerned that they simply won’t have enough hospital beds to care for ill patients and are taking drastic steps to “flatten the curve” – spreading out the timeline of the disease so that the health care system can manage the influx of new cases.

This is just as true in New Hampshire as across the country. However, the prime reason we don’t have more hospital beds is not a lack of demand, but government regulation.

According to U.S. Census data, New Hampshire’s population has grown by 48% since the 1980 census. However, the last new hospital to open in the Granite State did so in 1983.

The reason why our state hasn’t built more hospitals since then isn’t lack of demand. With a growing and aging population, our health care needs have gone up, not down.

The answer why we haven’t seen more hospitals and, thus, more hospital beds is because of government regulations that were intentionally designed to limit competition and choice. Sadly, these regulations have been effective in achieving those goals.

For many years, the prime culprit from new hospital development was the state’s Certificate of Need (CON) board. For someone to get a license to build a new hospital, they would have to go before this board and hope to get a government permission slip to have the opportunity to begin. Unsurprisingly, the CON board became a protection racket for the state’s existing hospitals to stop new development.

Thanks to the work of Americans for Prosperity activists and critical policy champions like Senator John Reagan and former Representative Marilinda Garcia, New Hampshire was able to put an end to the CON board in 2016.

The article cites some other regulations that limit the number of hospital beds:

One regulation forces anyone who wants to open a hospital to have a 24 hour per day, seven day per week emergency department. Given that emergency departments are the most expensive and toughest to staff part of any hospital, this is a huge barrier to opening a new facility.

And, like most cronyism, existing hospitals made sure this requirement doesn’t apply to any hospital that had its license before the law was passed.

Another regulation forces any new hospital to take reimbursement from all payers, regardless of whether doing so makes sense for that hospital’s business model. Across the country, cash-only facilities are thriving, providing lower cost alternatives to patients. But, under state law, they can’t operate in the Granite State.

Finally, one state regulation provides for a 15-mile radius monopoly zone around smaller hospitals in more rural areas. This guarantees that anyone outside of the southeastern part of New Hampshire will never see another hospital being built in their community, or anywhere near them.

While changing these laws won’t help us fight the COVID-19 virus, it’s high time the state legislature begins to remove these barriers to help us deal with the next pandemic. Our public health infrastructure has been unnecessarily hobbled, not by disease, but by special interests.

North Carolina is one of the states with Certificate of Need (CON) laws. According to the National Conference of State Legislatures, 35 states and Washington, D.C. operate a CON program with wide variation state-to-state. I suspect that number is high–they may be including laws that are not technically CON laws. At any rate, North Carolina has been trying to repeal its CON law for a number of years. CON laws interfere with the free market and artificially inflate medical costs by creating monopolies. One way to lower medical costs without sacrificing quality of care would be to remove CON laws. However, hospitals like their monopolies.