Lawmakers have a chance to end state's CON game
Published February 9, 2023
By Mitch Kokai
The N.C. General Assembly could turn a New Bern eye surgeon’s three-year legal battle into a moot discussion.
But it’s unlikely that Dr. Jay Singleton would complain. He would end up with the same result as if he had won his ongoing lawsuit against state health care regulators.
Singleton wouldn’t be the only winner. Anyone who cares about boosting access to health care in North Carolina would benefit as well.
That’s if the General Assembly moves forward with Senate Bill 48. Filed on Jan. 31, the bill would repeal North Carolina’s certificate-of-need laws.
The certificate, or CON, serves as a form of government permission slip. If a health care provider wants to add beds to an existing hospital, open a new health care facility, or even add a major piece of medical equipment, it’s likely that he needs to seek authorization first from state overseers.
Supporters say the CON process helps prevent duplicative, costly construction and equipment purchases. They believe an oversupply of health care services will eventually lead some providers to fail, leaving consumers with fewer, more costly options. Allowing a centralized government bureaucracy to manage major purchasing and expansion decisions will help ensure that health care supply falls in line with demand.
Critics respond that CON gets supply and demand completely wrong. Allowing health care providers to respond to demand, without government interference, will lead to more options for patients. Competition will generate better service and lower prices.
Opponents also point to tangible results of the CON game. Providers face years of red tape and thousands — even hundreds of thousands — of dollars in expenses to secure a certificate. Even success at the earliest stages of the process can fall flat as competitors challenge CON decisions in court.
The CON process can produce absurd results.
In 2019 the N.C. Court of Appeals settled a dispute between Duke Health and Raleigh Radiology over adding a new magnetic resonance imaging machine in Wake County. Rather than allowing both providers to purchase an MRI machine, state regulators decided only Duke should win a CON. An administrative law judge reversed that decision, giving the single valuable CON to Raleigh Radiology instead.
Appellate judges then sided with Duke. They determined that regulators had followed the proper legal process in awarding the CON.
The kicker? “Admittedly, there was evidence that Raleigh’s proposed MRI machine was superior to the machine that Duke would use,” Judge Chris Dillon wrote.
Not only does CON thwart competition. In the 2019 case, evidence suggested that the process might have blocked patients from access to “superior” equipment. It’s hard to believe anyone supports that type of outcome.
Singleton is a board-certified ophthalmologist. He has owned and operated Singleton Vision Center in New Bern since 2014. His “full-service” clinic provides “routine vision check-ups, treatments for infections, and surgery,” according to court documents.
The CON law forces Singleton to perform most surgeries at New Bern’s Carolina East Medical Center, “the only licensed provider with an operating room certificate of need located in the tri-county planning area of Craven, Jones, and Pamlico counties.”
Singleton filed suit in April 2020 to challenge government restrictions. Working with lawyers from the Institute for Justice, Singleton has asked the judiciary to reaffirm the state Supreme Court’s decision in a 1973 case known as Aston Park. That decision struck down an earlier version of North Carolina’s CON law.
A trial judge dismissed Singleton’s suit in June 2021. A unanimous three-judge N.C. Court of Appeals panel also ruled against the New Bern doctor. He hopes the state Supreme Court will take his case.
In a brief filed last October, Singleton’s lawyers asked the high court to settle any lingering disputes about CON. The brief focused on three sections of the N.C. Constitution’s Article I, the Declaration of Rights. Section 19 deals with the “law of the land” and equal protection of the laws. Section 32 bans “exclusive emoluments,” sometimes referred to as special privileges. Section 34 outlaws perpetuities and monopolies.
“Dr. Singleton’s challenge to the CON law exposes the rampant confusion in this Court’s cases about how Art. I, [sections] 19, 32, and 34 apply to economic laws,” according to the brief. “And this case is a perfect vehicle to resolve that confusion.”
The state Supreme Court has not yet decided whether to take Singleton’s case. If state lawmakers approve S.B. 48, courts might not need to address Singleton’s complaints, or any other CON-related disputes, again.
It’s a result that would help one New Bern eye surgeon focus all his attention back on serving patients. It’s a result all fans of better health care access should want to see.
Mitch Kokai is senior political analyst for the John Locke Foundation.