North Carolina is on the brink of delivering long-overdue relief to patients and health-care providers by advancing Senate Bill 370, a powerful reform that would eliminate many of the state’s outdated Certificate of Need (CON) laws. The bill has already passed the North Carolina Senate with overwhelming support in April and now awaits action in the House Rules Committee, alongside the House’s companion version of CON repeal.
Lawmakers should move quickly. North Carolina has the highest health-care costs in the nation, with residents facing high premiums, deductibles, and out-of-pocket expenses.
Our state’s General Assembly has led the nation toward fiscal responsibility and free markets in so many ways over the last decade, yet CON remains a relic and an outlier in the drive toward good government. However, repealing CON is not just good policy — it is a moral imperative rooted in liberty, competition, and consumer choice.
WHAT ARE CON LAWS AND WHY DO THEY STILL EXIST?
Certificate of Need laws, relics of the 1970s, were originally pitched as a tool to control health-care costs by limiting duplicative services. The idea was that requiring state approval before building new hospitals, expanding existing facilities, or purchasing high-tech equipment would somehow make care more efficient.
Instead, what we got is the worst kind of central planning: a bloated bureaucratic process where entrenched hospital systems can — and frequently do — block competitors from entering the market. Under CON, if a doctor or entrepreneur wants to open an outpatient surgical center or add MRI capabilities, they must not only beg state regulators for permission but often face lawsuits and delays from existing providers trying to protect their turf.
This is protectionism masquerading as policy. And it’s hurting North Carolinians.
HOW CON LAWS HARM PATIENTS AND THE FREE MARKET
The evidence is overwhelming. States without CON laws consistently see lower health-care costs, better access to care, and more innovation. A 2024 study of 35 states by economists James B. Bailey and Shishir Shakya provides empirical evidence that states that repealed their CON laws experienced significant reductions in health-care spending. Their analysis suggests that removing these regulations allows for increased competition among health-care providers, leading to more efficient service delivery and cost savings for patients.
By choking off competition, CON laws allow dominant players to consolidate power, limit services, and drive up prices. Patients in rural areas are especially impacted, as hospital monopolies use CON to squash new clinics that could bring care closer to home. In some cases, facilities that receive a Certificate of Need from the government sit on it to block others from the market, rather than actually using it to provide the service they promised.
This anti-competitive framework stifles the very forces that improve quality and drive down costs in every other sector of our economy.
In North Carolina, nearly 25 separate healthcare services and devices require a CON. That means everything from psychiatric beds to CT scanners are subject to approval not from the market, but from bureaucrats and competitors with a vested interest in saying “no.”
This is not how a free society treats access to essential services.
SENATE BILL 370:
Senate Bill 370 offers a long-awaited path to reform. It would eliminate CON requirements for:
- Ambulatory surgical centers (ASCs)
- MRI scanners and certain diagnostic equipment
- Behavioral health beds
- Some cardiac diagnostic services
These are precisely the areas where need is greatest and where entrepreneurs and innovators are eager to provide services, if only the state would get out of the way. Importantly, the bill doesn’t ban large health systems from expanding — it simply lets others compete on a level playing field.
This is not deregulation for its own sake. It’s a return to first principles: that consumers — not corporations or bureaucrats — should decide what health-care options are available.
The bill now sits in the powerful House Rules Committee, where many good reforms have gone to die in the past. But this time can be different. Lawmakers must see through the scare tactics of hospital lobbyists who claim that removing CON will cause chaos or reduce access.
The market is ready. Health-care entrepreneurs are ready. Patients are more than ready. Now it’s time for the legislature to be ready, too.
