by Brian Balfour
Senior Vice President of Research, John Locke Foundation
Legislation introduced this week would decrease healthcare costs and increase access to medical care for North Carolinians, by eliminating our backwards and restrictive Certificate of Need (CON) laws.
House Bill 410, sponsored by Republicans Kidwell, Hanig, Goodwin and Sasser; along with an identical Senate Bill, SB 309, sponsored by Republicans Hise, Krawiec and Burgin, would completely strike CON laws from North Carolina’s General Statutes.
Eliminating CON laws has been a policy long supported by the Locke Foundation. The laws essentially require medical facilities to get permission from a state government committee to acquire certain types of new equipment or otherwise expand their capacity. More often than not, the committee is packed with large incumbent medical care providers who have an interest in preventing their competitors from expanding to serve more patients.
The process of navigating CON laws itself is so time consuming and expensive, many potential providers never even try. The result is fewer options for North Carolinians in need of care, which also helps to drive up prices.
A study published by Locke in January concluded that “CON is associated with 30% fewer hospitals per capita, 13% fewer hospital beds, 14% longer emergency room wait times, and 3% higher spending.” Their elimination would of course help to reverse those trends.
CON elimination would be of particular benefit for those in need of mental health and substance abuse treatment. The study projected that CON elimination would increase the number of psychiatric hospitals from 15 to 18, a 25% increase, and increase the number of substance abuse facilities accepting private insurance and Medicaid – making it affordable to more people in need.