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.