by Brenée Goforth
Media Manager & Communications Associate, John Locke Foundation
North Carolina has decided to waive Certificate-of-Need (CON) restrictions on hospital beds in response to the Coronavirus outbreak. Carolina Journal’s Julie Havlak explains:
The N.C. Department of Health and Human Services Thursday, March 12, temporarily lifted a regulation requiring hospitals to get state permission to add beds. The rule said hospitals couldn’t add more than 10% of their licensed bed capacity without state approval. The department’s decision made the first crack in the state’s Certificate of Need laws in decades, despite the legislature’s yearly attempts to overhaul the state caps on medical buildings and equipment.
…Now hospitals can temporarily add and relocate beds into any space that meets federal safety requirements. The rule change targets patients infected with coronavirus, and patients who need to be moved to accommodate an influx of coronavirus patients.
CON laws require that, when a hospital wants to expand or add services, they obtain a (highly expensive) permission slip from the government. In theory, these laws prevent hospitals from expanding too quickly and passing on these expansion costs to patients; however, in reality, they artificially restrict the supply of medical goods and services, therefore, increasing prices for patients. Havlak writes:
Experts feared CON laws would slow hospitals’ ability to treat patients if a coronavirus outbreak overwhelmed the state’s health care system.
Before NCDHHS suspended the rules, hospitals couldn’t add or relocate acute care beds without applying for a CON. Applying for a CON can cost as much as $500,000, and the state board which grants CONs doesn’t meet for months.
The State Health Coordinating Council — which approves CON applications — doesn’t meet until June. The Acute Care Services Committee meets in April.
“If it gets to a situation where a hospital, big or small, would need to make quick decisions on the amount of beds they need, they don’t have to worry about getting permission from the state,” said Jordan Roberts, John Locke Foundation healthcare policy analyst.