Treasurer takes aim at NC’s CON health care restrictions

Count North Carolina’s state treasurer among those who want government-imposed certificate-of-need restrictions removed from the health care sector.

Treasurer Brad Briner filed a friend-of-the-court brief this month supporting a New Bern eye surgeon who challenges North Carolina’s CON law as unconstitutional.

The treasurer’s office oversees the State Health Plan. It serves 750,000 active and retired government workers. The plan “is one of the largest purchasers of healthcare in North Carolina, and its costs are a significant portion of the State’s budget,” Briner’s lawyers wrote. Costs reached $4.5 billion in the last budget year.

As “keeper of the public purse,” Briner focuses on the CON law’s impact for costs and access.

A three-judge trial court panel hears Dr. Jay Singleton’s CON law challenge this week. Judges are considering both state government’s motion to dismiss the case and Singleton’s motion for summary judgment.

The certificate of need acts as a government permission slip. Health care providers cannot build a hospital, add beds, open many other health care facilities, or even purchase high-dollar medical equipment without a CON.

The CON law blocks Singleton from performing most eye surgeries at his New Bern office. Though he is equipped to do the work, state government requires him to send patients to CarolinaEast, a hospital with the region’s only CON.

“In Treasurer Briner’s view, Dr. Singleton has properly alleged that the Certificate of Need (‘CON’) law has an improper purpose and is not a reasonable means of achieving even its asserted purpose,” Briner’s lawyers wrote.

“Although the CON law’s stated purpose is to lower healthcare costs while increasing access, the CON law’s actual purpose is to protect institutionalized and incumbent healthcare providers at the expense of would-be competitors, those who need healthcare, and taxpayers,” the brief argued.

“Further, even assuming the CON law’s stated purpose is its actual purpose, the CON law is not a reasonable means of achieving that purpose,” Briner’s lawyers added. “Rather than lowering healthcare costs and improving access to healthcare, the CON law has the opposite effect — it raises costs and diminishes access.”

“In addition, the CON law effectively prohibits new providers from entering the market, imposing a draconian burden,” Briner argued. “Thus, in the Treasurer’s view, Plaintiffs’ complaint alleges colorable claims under both the Fruits of Their Own Labor Clause and the Law of the Land Clause of the North Carolina Constitution.”

Article I, Section 1 of the North Carolina Constitution guarantees people’s “inalienable” rights to “life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.” The “fruits” clause covers economic rights. Article 1, Section 19 guarantees that no person shall be deprived of “life, liberty, or property, but by the law of the land.”

Briner’s brief supports Singleton’s argument that “[t]here is no evidence, and Defendants will be unable to produce any evidence, that the CON requirement lowers costs, increases access to care, or helps real patients in any way.”

Singleton says he can provide a cataract surgery for $1,800. The facility fee alone at CarolinaEast approaches $6,000. “Thus, as it stands, care for these patients is less affordable and more difficult to access because the CON law precludes Dr. Singleton from operating a formal surgery program,” Briner’s lawyers wrote.

The treasurer cites Singleton’s CON law complaint: “North Carolina’s CON law is fundamentally anticompetitive: Established providers are insulated from competition in their service areas; aspiring providers are prevented from participating in the healthcare market solely because other providers got there first; and when state planners project a ‘need’ for a new service or facility — which they usually do not — incumbent providers are given every opportunity to thwart, undermine, and frustrate potential competitors’ applications, while at the same time exerting their considerable economic advantage to obtain the new CON for themselves and thus, retain their monopoly status.”

Briner’s response? “[B]ecause the CON law does not promote the public good nor prevent a public harm, but rather promotes anticompetitive behavior by institutionalized and incumbent healthcare providers to the detriment of North Carolina citizens, taxpayers, and other healthcare providers, it does not serve a proper governmental purpose.”

A unanimous North Carolina Supreme Court decision in October 2024 allowed Singleton to proceed with his lawsuit. Yet that ruling does not guarantee him an ultimate victory.

As judges weigh pros and — no pun intended — cons of competing legal arguments in the case, at least one statewide elected official supports a clear choice. Briner backs the course that serves the best interests of the State Health Plan and consumers throughout North Carolina.

Mitch Kokai is senior political analyst for the John Locke Foundation.