by Julie Tisdale
City & County Policy Analyst
In effect, these programs intend to create quid pro quo arrangements: state governments restrict competition, increasing the cost of health care for some, and in return medical providers use these contrived profits to increase the care they provide to the poor.
However, these claimed benefits have failed materialized as intended. Recent research by Thomas Stratmann and Jacob Russ demonstrates that there is no relationship between CON programs and increased access to health care for the poor. There are, however, serious consequences for continuing to enforce CON regulations. In particular, for North Carolina these programs could mean approximately 12,900 fewer hospital beds, 49 fewer hospitals offering MRI services, and 67 fewer hospitals offering computed tomography (CT) scans. For those seeking quality health care throughout North Carolina, this means less competition and fewer choices, without increased access to care for the poor.
The trend across the country for the last thirty years has been to eliminate CON programs, but North Carolina remains one of 36 states that still has these laws in place. And North Carolina’s is among the worst, regulating more services and procedures than all but two other states and D.C.
These programs have simply been found to be ineffective. They don’t lower costs. In fact, these researchers estimate they may actually increase costs by as much as 5%. People have widely differing views about health care, but I don’t know anyone who thinks it needs to be more expensive.
Worryingly, the researchers conclude:
While certificates of need are neither controlling costs nor increasing charity care, they continue to have lasting effects on the provision of health care services both in North Carolina and in the other states that continue to enforce them. However, these effects have largely come in the form of decreased availability of services and lower hospital capacity.
This translates into an estimated 12,900 fewer hospital beds, 49 fewer hospitals offering MRIs, and 67 fewer hospitals offering CT scans. If we want to increase the availability of health care across North Carolina and lower the costs for all patients, then getting rid of CON laws is a good place to start.