by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
It’s going to take a while longer for the North Carolina Legislature to pass its two-year budget. Part of the hold up will be finalizing an agreement on reforming the state’s certificate of need (CON) law, which requires health systems and medical providers to first obtain a hall pass from the state, and then their competitors, before expanding or updating certain services or facilities. Some consider CON laws necessary to help restrain health care cost inflation by preventing an overinvestment in underutilized resources. Others interpret CON as the epitome of protectionism.
A lingering sticking point, brought up by legislators committee meeting after committee meeting after committee meeting, is whether removing CON regulations will exacerbate the demise of rural health care. CON proponents have long argued that the law helps preserve rural infrastructure. Repealing the law, they contend, could lead to a greater concentration of health care facilities such as ambulatory surgery centers (ASCs) in more urbanized areas — ultimately attracting more rural patients and putting rural community hospitals at risk.
But even with the law intact, these patient migration trends have already taken shape. As the Harvard Business Review puts it:
“These hospitals are caught in a vicious cycle: Rural patients with serious health problems are traveling to cities to seek care from medical specialists, causing revenue declines at rural hospitals and clinics, which respond by downsizing and offering fewer services, causing more patients to seek care in major urban centers.”
It is therefore questionable whether CON ensures access in medically underserved areas. Read more from my latest newsletter here.