by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
The New Hampshire House has voted to repeal that state’s Certificate of Need Board. Good for them.
In North Carolina and 34 other states, if you are a health care entrepreneur and you want to do anything from adding a new wing or extra beds to an existing hospital, to opening an office that offers MRI or other services, you need a “Certificate of Need” from the state. If this sounds like the kind of central planning one might find in a socialist economy – it is. In North Carolina, the central planning authority is known as the Health Planning Development Agency, part of the North Carolina Department of Health and Human Services. The role of this agency is to plan economic activity provided by medical-care facilities. This is done down to the most minute detail, circumventing the most basic function of private decision-making in a free enterprise system, i.e., the allocation of resources based on entrepreneurial insight and risk taking.
Apparently, one of the supposed reasons for the system is that
rural hospitals need certificate of need to protect them from competition because nobody is seeking to challenge their local monopolies. As recently as 2000, just 18 of 100 counties had more than a single hospital system.
Ridiculous, right? But all too real.
Kudos to the NH House.