John Locke Update / Research Brief

NC’s stranglehold on access to medical care should end

posted on in Government Reform, Health Care, Health Care & Human Services, Law & Regulation, Rights & Regulation
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Note: This column was originally published on February 18, 2021, by the News & Observer and the Charlotte Observer.

  • New research exposes how state government has a stranglehold over psychiatric care and substance abuse treatment
  • North Carolina’s archaic certificate-of-need laws leave the state with significant deficits in psychiatric hospitals and substance abuse facilities — and higher prices
  • North Carolina should join the 15 other states that eliminated certificate-of-need laws

Right now, in homes across our state, there are people living in despair, with too many contemplating desperate actions. For some it’s the pandemic’s isolation and job loss. For others it’s an addiction that’s dragged them into a dangerous spiral. I thought about these friends and neighbors as I read the work of Dr. James Bailey in new research about state government’s stranglehold over psychiatric care and substance abuse treatment. It’s a fact that our state’s archaic certificate-of-need laws are hurting fragile North Carolinians. Compassion and common sense should move us to repeal these laws.

Certificate-of-need (CON) laws require medical providers to get approval from a state government commission before expanding facilities, opening new ones, or adding certain equipment and devices. The state — not medical professionals — decides how frontline providers can treat their patients. North Carolina is one of 35 states with a CON program. Ours is the strictest in the Southeast and the third strictest in the country, according to the Mercatus Center at George Mason University. Nearly two dozen types of care are swept up into our CON requirement.

To calculate the real-world impact of CON laws on restricting health care access, and mental health and substance abuse treatment in particular, Dr. Bailey of Providence College conducted research for my organization. Why this focus? Because today, despite growing mental health and substance abuse problems, America faces a treatment shortage. The Treatment Advocacy Center recently revealed, “From their historic peak in 1955, the number of state (mental health) hospital beds in the United States had plummeted almost 97% by 2016.”

Jarring.

And it’s no better for substance abuse care. Last year the American Addiction Centers reported that “only about 18% of those who needed (substance abuse) treatment were able to access it.”

Bailey’s research determined that CON laws significantly contribute to the restricted access confronting these growing populations, finding certificate-of-need law is associated with a state having 20 percent fewer psychiatric hospitals, and a statistically significant reduction in substance abuse facilities accepting private insurance and Medicaid.

Based on Bailey’s estimates, North Carolina could significantly help the most vulnerable by repealing its CON requirement for psychiatric hospitals. We have 15 facilities now. In a CON-free environment, that number would likely jump to 18. The same progress would hold for substance abuse facilities. Bailey concludes that an additional six facilities would accept private insurance and 12 more would accept Medicaid. North Carolinians saddled with addictions would find it easier to pay for treatment.

More generally, Bailey determined these laws restrict care options for all of us.

Need to go to the emergency room in a state with a CON law? Wait times are 14% longer. Need to be admitted to a hospital? You’ll find 30% fewer hospitals per capita and 13% fewer hospital beds. Need an MRI or CT scan? Get in line. Twenty six percent fewer hospitals offer them in CON states.

Predictably, less supply translates into higher costs. Health care prices are, on average, 13.8 percent higher in CON states. Translation: health care is more expensive in North Carolina because the state holds a tight grip on facilities and equipment.

As we navigate COVID-19, the reality of Bailey’s research is staring us in the face. Imagine being a parent who is desperately seeking care for your child who is losing a life-threatening battle with depression or substance abuse. Imagine your despair when you find there’s little or no treatment readily available.

We can do better. We must do better. North Carolina should join 15 other states in eliminating our certificate-of-need laws. And fast.

 

Brian Balfour is Senior Vice President of Research for the John Locke Foundation, where he oversees the organization’s research and analysis on a variety of issues. He previously worked for the Civitas Institute for 13 years, and has a master’s… ...

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