Senate budget would repeal Certificate of Need laws

Published June 20, 2015

by Brian Balfour, Civitas Review online, June 19, 2015.

Among several differences between the House and Senate budget proposals is the Senate's inclusion of an elimination of North Carolina's Certificate of Need (CON) laws. Matt Caulder at Capitol Connection has a nice summary of the story here.

CON laws, which have been in place since 1978, require health care facilities to obtain certificates recognizing a need, in the eyes of state regulators, for a certain piece of equipment or to make other changes before the facility can make the change.

In short, CON laws restrict the supply of medical care by forcing providers to first get government permission to expand their operations. Big hospitals like CON laws because it helps protect them from competition.

For years, Civitas has been advocating for the repeal of out state's CON laws. Back in 2011 we published a five-part series laying out several arguments against CON, including one article that references the hospitals' real motivation for supporting the law:

One hospital industry respondent to a National Institute for Healthcare Reform Study reported “member hospitals initially had mixed views about the benefits of CON but banded together to support the process after realizing it was a valuable tool to block new physician-owned facilities."

Moreover, Civitas also posted two short video clips from a revealing 2013 interview with Dr. William C. Padgett of Beaufort County, in which Padgett describes how CON laws are denying his community a much-needed assisted living facility. The real victims of CON laws are those seniors in Beaufort County being denied access to facilities that would enhance their quality of life.

The House and Senate are set to begin debate to settle the differences between their budget plans, here's hoping CON repeal makes it to the final version.

June 20, 2015 at 10:18 am
Richard L Bunce says:

Good, hospitals should focus on business only they can provide and charge a rate that supports that business... Medicare and Medicaid will have to start actually paying the full cost of their services. This is similar to the USPS and letters/parcels.