Getting Past The CON Laws

According to the Mercatus Center at George Mason University, as of 2016, 35 states have Certificate of Need (CON) Laws.

The website notes:

This means that 35 states and the District of Columbia currently prohibit entry or expansion of healthcare facilities through CON programs.

North Carolina is one of those states with CON programs. The Carolina Journal posted an article about how those programs impact medical care in those states.

The Carolina Journal states:

It’s especially bad when government encourages health care providers to act more like bullies than healers. But that’s exactly what can happen with North Carolina’s certificate-of-need regime.

A recent court case highlights the problem. On July 6, a unanimous three-judge panel of the N.C. Court of Appeals agreed to grant a certificate of need to InSight Health Corp. The ruling affirmed earlier decisions from state regulators and an administrative law judge. In that sense, the ruling was unremarkable.

But details of the case, spelled out in Judge John Tyson’s 17-page opinion, highlight CON’s unsavory impact on N.C. health care.

The certificate of need is a government permission slip. Without it, health care providers are banned from opening new facilities, adding beds to existing hospitals, or even purchasing larger pieces of medical equipment. A government-appointed board working with state bureaucrats decides when and where to issue a CON.

One piece of equipment subject to a state CON is the positron emission tomography, or PET, scanner. It offers images that show how patients’ tissues and organs are functioning. In 2018 state government decreed that N.C. health consumers needed exactly one new mobile PET scanner across the state.

Without CON restrictions, health care providers would have been free to make their own decisions about adding new PET scanners. One or more providers might have put new scanners into operation in 2018, giving patients more options.

Instead the state forced interested providers to compete for a single CON. The certificate would grant the winner the exclusive right to purchase a new PET scanner. The winner would reap all financial benefits from additional scans.

The article explains that when the winner was named, one of the other competitors filed a complaint.

The article notes:

Now, three years after the state decided to offer a CON and two years after awarding it, there’s still no new PET scanner. All we have is a ruling from North Carolina’s second-highest court. It’s not even clear that the legal fight is over.

Bureaucratic and legal delays would be bad enough. But Tyson’s opinion highlighted evidence of behavior no one should expect from organizations devoted to boosting people’s health.

The article concludes:

InSight was able to secure supporting documents from hospitals in Caldwell and Jackson counties. But Mobile Imaging later approached leaders of both hospitals. Mobile’s team had drafted letters that would rescind support for InSight’s application. One hospital official signed the letter, leaving InSight with a single hospital willing to go on record supporting its CON application.

Despite having signed the letter, the hospital president who went along with Mobile Imaging’s scheme later testified that she still would have considered working with InSight if it won the CON.

In other words, the only objection to InSight’s bid was active opposition from a competitor with an “effective monopoly” on existing services. Tyson noted “ample evidence” of Mobile Imaging’s “anti-competitive behavior.”

Nothing looks good about Mobile Imaging Partners’ actions in this case. Its behind-the-scenes maneuvers look especially bad when one considers the CON’s purported goal: increased access to health care. You’ll search in vain to find bullying and scare tactics among the skills taught to health care professionals.

This entire problem (including the court case) could be settled by ending the CON Laws in North Carolina. There has been a bill brought up in the North Carolina legislature to end CON Laws in at least one recent session The problem is that the bill has been traditionally sent to a committee where it dies. CON laws cost consumers and health insurance complanies money. CON Laws need to end.

Why Elections Matter

Yesterday The Carolina Journal posted an article about North Carolina spending policies in recent years.

The article reports:

At $6 trillion, President Joe Biden’s first budget calls for an unprecedented level of federal spending. Republican members of Congress who criticize the president’s plan are understandably reminded by Democrats that the GOP did not do much to resist—and even contributed to—excessive government spending during President Donald Trump’s time in office. During those four years, rampant spending led to nearly $8 trillion in more federal debt, though this included pandemic-related funding approved with bipartisan support. Still, this represents a 40% jump in mortgaging the future of ourselves, our kids, and our grandkids. It’s time for responsible budgeting at every level of government.

Republicans in Washington don’t have much of a leg to stand on when it comes to criticizing the profligacy of congressional Democrats and the Biden administration. But Republicans in many state capitals across the country, however, do. That’s because Republican governors and lawmakers in several states are getting government spending under control by passing conservative budgets which remain below population growth plus inflation. North Carolina is among the most prominent examples of this phenomenon—but is not the only one.

Since Republicans took control of the North Carolina General Assembly for the first time in a century a decade ago, they have kept growth in state spending on a conservative budget trajectory that keeps government growth within the average taxpayer’s ability to fund it. Since 2013, North Carolina state spending has grown by an average of 2.24% annually, which is below the population growth plus inflation rate of 2.58%.

These fiscal policies in North Carolina have resulted in budget surpluses and the lowering of the state income tax.

The article notes:

North Carolina lawmakers are now working to enact a new conservative budget that provides further tax relief. Those who want to continue the sustainable budgeting of recent years received good news in early June as legislative leaders from both chambers of the General Assembly announced a consensus spending figure that, if the new budget does not exceed it, would have state spending continue to grow slower than the combined rate of population growth plus inflation. More recently, the North Carolina Senate unveiled its version of the budget, which, in addition to spending less than the figure agreed to with the House in early June, cuts the personal income tax rate from 5.25% to 3.99% while phasing out the corporate income tax by 2028. That budget was approved with a bipartisan, veto-proof majority in the North Carolina Senate on June 24.

“We are pleased to see that the fiscal restraint the General Assembly has shown over the last ten years will continue,” said Brian Balfour, senior vice president of research at the John Locke Foundation, a Raleigh-based think tank. “It’s a strategy we would like to see added to the state constitution in the Taxpayer Bill of Rights.”

These policies have had the following results (reported in Global Trade):

NORTH CAROLINA

The second-largest food and beverage manufacturing state and the overall fifth-largest manufacturing state in America, North Carolina is home to the largest manufacturing workforce in the Southeast. The manufacturing industry employs 460,000 skilled workers in North Carolina–nearly 11 percent of the state’s workforce. North Carolina manufacturing makes up about 20 percent of the state’s gross state product, to the tune of $102.48 billion in 2017 and $31.06 billion in exports in 2018. North Carolina has experienced tremendous growth in manufacturing goods in recent years, with a nearly 35 percent increase in exports from 2010 to 2018. North Carolina’s pro-business climate and expert workforce make it an ideal state for manufacturers.

North Carolina has set an example Washington, D.C. needs to follow.

When Medical Facilities Have Monopolies

The Carolina Journal posted an article today about the Certificate of Need (CON) laws in North Carolina.

The article notes:

In theory, the system is supposed to guard patients’ access to health care.  

But the system offers a wealth of opportunities to crush unwanted competition and hamstring smaller doctors’ practices. Under CON laws, incumbent providers can take their competitors to court and force them to bleed money for months, years, or even decades.  

It may be easy to praise the system on the record. But those who criticize it do so quietly, and they fear retribution. Many declined to publish their names in this story or to speak on the record.  

“It’s human nature, so I shouldn’t be surprised, but I have clients who think it’s unconstitutional, it’s terrible, it’s an unfair restraint on trade,” said a CON attorney. “But once they get it, CON is great, it’s saving money, it’s good for the people. It’s incredible the metamorphosis they undergo.” 

According to the article, the fight against the CON laws began with Dr. Gajendra Singh, a surgeon who tried to treat poor patients. He watched patients put off medical tests only to find that they had terminal cancer that might have been checked if detected earlier.

The article reports:

Singh began the fight Singleton (Dr. Jay Singleton) carries on. 

Singh watched his patients being crushed by medical bills or catching cancer too late. One man put off getting an MRI for more than a year. What he found was worse than any medical bill. 

“So, I saw it,” Singh told WFDD. “He had a cancer spread everywhere. And that was a Stage 4 cancer. And I felt guilty. Like you know, that as a society we had failed him.” 

Singh founded his own imaging center in Forsyth County a year later, and sued to overthrow the CON regime. He is something of a legend now, at least in pockets of the medical community. 

Singh saved his patients thousands of dollars. Some drove for hours; some came from other states. Some came because of mysterious pain, and others because these were the only scans they could afford. 

“Singh, man, gotta hand it to him. But he bit off a lot,” Singleton said. “He went after the MRIs, the ‘Shangri La,’ the temple.” 

But Singh’s practice collapsed under the stress inflicted by CON laws and the COVID-19 pandemic. His patients have lost their access to affordable medical scans, and Singh has stopped talking to the press.  

“Trailblazers are usually found dead on the trail,” Singleton said. “You want to be the second guy, the third guy. Not the first guy.” 

Please follow the link to read the entire article. The article cites other examples of doctors who tried to treat patients in need and were blocked by CON laws. Thirty-five states currently have CON laws.

The article concludes:

Even former council members can’t agree on whether the CON process is driven by data or swayed by politics.  

The 25-member State Health Coordinating Council is dominated by hospital systems, which control at least 10 seats. Two business advocates, two elected lawmakers, and one insurer are tasked with representing small and large businesses.  

The critics accuse the state of playing politics with patients’ access to health care. They point to studies showing that CON states have fewer rural hospitals. 

“It’s very political. You can look at the council, see who’s there, and whose interests they’re protecting,” said a former council member who feared retribution. “Reality is, there’s an oligopoly. There’s a few big medical centers. They have all the money and all the clout.” 

CON’s supporters say the council protects the state from a destructive medical arms race. They warn that rural hospitals will close if exposed to uncontrolled competition. 

“When hospitals had to shut down electives, rural hospitals really struggled,” said Cody Hand, lobbyist for the N.C. Healthcare Association. “Without the CON laws, those hospitals couldn’t make it financially. …. Our fear is that, without CON, someone could come in and easily pick those profitable services off.” 

Another former council member believes CON laws have created monopolies. He supports parts of CON, but its process forced him to spend hundreds of thousands of dollars on CON’s legal battles. 

“If they keep filing lawsuits, they can delay that competitor from coming in, and they’ll make up the legal fees,” the former council member said. “That’s been a nasty battle, there’s still bad blood between the two parties. The scars are still there.” 

He believes there has to be a legal recourse for providers. But he also acknowledged the dangers of the current system. 

“It’s crazy, crazy stuff,” he said. “The small guys, the hospital can beat them down.” 

CON reform is notoriously difficult to move in the legislature. But the N.C. Healthcare Association does support reforming the litigation that dogs the CON process, Hand said.  

Hand said he wouldn’t oppose raising the bond — or the $50,000 competitors must stake to sue over CONs — to create a “good faith scenario.” But he rejected any repeal efforts.  

“It’s a burden on my members as well,” Hand said. “But [repeal] for us is a baby with the bathwater issue.” 

Singleton is less charmed. If he heard Hand’s comment, he would likely accuse him of drowning the baby. 

“In the face of CON, you find out who the true predators are,” Singleton said. “Small hospitals have to fear our larger hospitals, kind of like fish.” 

Long before I moved to North Carolina, I had cataract surgery. Because there was a time lag between when each eye needed the surgery, the first surgery was done at Massachusetts Eye and Ear Hospital in Boston, the second at Surgisite Boston, a modern ambulatory surgery center that is used by 70 ophthalmologists from throughout the region, located in Waltham, Massachusetts. Aside from the ease of getting to the site and the available parking, the Surgisite had the most up-to-date equipment and was amazingly efficient (as well as cheaper for my insurance company). There are some medical procedures that can be done very safely outside of a hospital at a much lower cost. Unfortunately CON laws prevent that from happening. CON laws create a very unproductive monopoly.

One Small Step Toward Election Integrity In North Carolina

On September 4, 2020, The Carolina Journal reported the following:

A three-judge panel has rejected a plea to block absentee ballot witness requirements for North Carolina’s fall election. The decision in N.C. Superior Court generated praise from the state Senate’s leader on election issues.

“The judges were right to reject this dangerous attempt to eliminate basic protections against fraudulent activity that took place in the most recent federal election, and I hope they do the same with the multiple other lawsuits filed by Washington Democrats this year,” said Sen. Ralph Hise, R-Mitchell, in a news release. Hise co-chairs the General Assembly’s Joint Legislative Elections Oversight Committee. He also leads a Senate committee on election and redistricting issues.

The judges agreed not to grant a preliminary injunction in the case of Chambers v. State of North Carolina. Filed July 10 by four individual plaintiffs working with the American Civil Liberties Union, the case challenges an absentee ballot witness requirement in state law. The law requires one adult to witness an absentee ballot. It places limits on who can serve as a ballot witness.

The lawsuit alleges violations of four sections of the N.C. Constitution. But Judges Alma Hinton, Robert Bell, and Thomas Lock disagreed with the plaintiffs’ arguments. The judges found that “there is not a substantial likelihood” that the plaintiffs would win the case.

The article concludes:

“Washington Democrats sued to overturn an election security law passed with bipartisan support in the wake of widespread absentee ballot fraud uncovered in the 2018 Congressional election for North Carolina’s Ninth Congressional District,” according to Hise’s news release.

“Witness signatures on absentee ballots helped uncover the fraudulent activity that took place in the 2018 Congressional election and is suspected to have taken place for many other elections before 2018,” the release continued.

“The court upheld the election integrity law that passed with broad bipartisan support after the NC-9 absentee ballot fraud,” Hise said.

Both state and federal courts have upheld the witness requirement, according to Hise’s release.

On September 1, I posted an article detailing some of the methods of voter fraud. Two of the targets of those who engage in voter fraud are absentee ballots and mail-in ballots. We do not need to do anything to make those ballots less secure, in fact, we need to do anything we can to make them more secure.