by Mitch Kokai
Senior Political Analyst, John Locke Foundation
While healthcare costs are rising, many look to government intervention as a viable solution. They forget how previous government interventions created many of today’s healthcare system problems.
Take, for example, laws requiring “certificates of need” for certain types of medical services. Such laws have only created healthcare monopolies that needlessly drive up the costs for the benefit of a few. These serve as a reminder that, before we consider solutions that add more government, we need to address the existing harmful effects of government interference.
Certificates of need are required before a medical provider can offer certain services or buy new equipment. The applicant must prove there is a “need” for the service in the community. If the government decides there is no need, then the applicant cannot offer that service and thus the area goes without the benefits of the added competition.
An example of the harm that this requirement causes is the cost of MRI scans. Depending on where you go and what body part you get scanned by the MRI, it can cost up to $13,000. Physicians who wish to provide affordable MRI services must apply for the privilege of purchasing an MRI machine. If the government determines there is no need for additional MRI machines in that area, then that community will continue to be underserved.