UNDERSTAND CERTIFICATE OF NEED (CON) LAWS:

Their Impact on Patients and Why They Persist.

Certificate of Need (CON) laws require entrepreneurial physicians and capital allocators to obtain state approval before opening new facilities, expanding existing ones, or making significant capital investments.

State approval comes, as a general matter, through a committee appointed by the Governor, including the existing health system executives and their insurance carrier partners.

CON laws have had several detrimental effects on patients, particularly those in underserved communities:

1. Reduced Access to Care:

CON laws can create significant barriers to accessing care by limiting the number of healthcare facilities.

Patients in rural or underserved areas may face long travel times to receive necessary treatments, leading to delayed care and poorer health outcomes.

2. Higher Prices:

Contrary to their intended purpose, CON laws often lead to higher healthcare costs. With reduced competition, existing providers can charge higher prices, knowing patients have limited options.

3. Stifling Innovation:

CON laws deter new and innovative entrepreneurs from entering the market. This restriction can slow the adoption of new medical technologies and services, ultimately affecting patients' quality of care.

Why Do Hospitals and Insurance Companies Love Their CON Laws?

Despite their negative impact on patients, hospitals and insurance companies often support CON laws for several reasons:

1. Market Protection:

By limiting the number of new entrants, existing hospitals face less competition. This protection allows them to maintain higher occupancy rates and profitability.

2. Negotiating Power:

With fewer medical facilities, hospitals have greater leverage in negotiating prices with insurance companies. This situation results in higher reimbursement rates for services and higher premiums.

3. Regulatory Certainty:

Established players in the healthcare market prefer the predictability of CON laws. This regulatory certainty allows them to plan and invest more confidently, knowing potential competitors have been eliminated.

Why Do Governors Support CON Laws?

Governors often support CON laws due to political and practical considerations:

1. Lobbying and Political Pressure:

Powerful hospital and insurance industry lobbies advocate for CON laws to protect their interests. These industries donate significant sums to political campaigns, influencing policymakers.

2. Perceived Cost Control:

Some policymakers believe CON laws help control healthcare costs by preventing overbuilding and excessive competition. They also think eating Doritos and drinking soda pop are crucial to a healthy diet.

3. Centralized Planning:

CON laws allow for a more controlled and planned approach to healthcare infrastructure, which some governors believe leads to a more balanced distribution of services across a state. These governors were ardent supporters of the USSR.

Certificate of Need (CON) laws do more harm than good, especially for vulnerable populations.

They limit access to care, drive up costs, and stifle innovation.

Despite these drawbacks, they remain popular among governors due to political pressures and misconceptions about their benefits.

Hospitals and insurance companies support these laws because they protect their market share and profitability.

Reforming these outdated regulations is essential to defending patients' interests, especially those of the poor and underserved.

-Rojas out