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ICYMI: Opinion: State should repeal certificate of need laws

Dec 12, 2019 by AFP

By: Chris McCoy

Dr. Gajendra Singh dreamed of providing affordable, quality imaging services to his patients in Winston-Salem.

In 2017, he founded the Forsyth Imaging Center, offering X-rays, ultrasounds and MRI scans. The price for each procedure was listed online so patients could easily compare the costs to those of traditional providers.

Innovative as his plan was, it came to a screeching halt after an anachronistic state law prevented him from serving the people of Forsyth County.

North Carolina is one of 35 states, plus the District of Columbia, that imposes certificate of need (CON) restrictions on health care providers. CON law requirements prohibit licensed medical professionals like Dr. Singh from offering “new institutional health services” unless they first receive permission from the state’s CON board.

The board decided that Forsyth County had no need for a new MRI machine. This decision effectively banned Dr. Singh from purchasing a new scanner and by extension, his patients from having access to more affordable MRI options.

Anyone who has ever had to get an MRI knows how costly the process can be. Even with health insurance, the service is often not covered until high deductibles are met, leaving many struggling to pay the bill.

Expanding access to care by giving patients more options significantly drives down the cost. CON laws prevent this from happening by blocking new providers from competing.

This situation is not unique to North Carolina. But other states have taken action to scale back these laws and protect patients from state-created monopolies on health care.

In July, Florida’s CON requirement was partially repealed. Prior to this change, CON law prevented two new pediatric heart transplant programs from opening in central Florida, where no such programs existed. Now, free from excessive regulatory burdens, AdventHealth and Orlando Health have sped up plans to open new facilities that will help fill this void in the region.

Repealing CON laws isn’t just a theoretical solution to the soaring costs of care. Other facilities are already in the works in Florida.

North Carolina should follow suit.

Proponents of CON laws argue that these restrictions maintain higher quality and lower prices by regulating who can provide certain services. Well-intentioned as this may be, the facts do not support this claim. In-depth research conducted by the Mercatus Center shows that CON law states have higher costs and lower quality ratings.

While the federal government repealed the federal mandate for CON law back in 1986, many states continued the practice.

The Obama-era Federal Trade Commission and Justice Department urged states to abandon the practice in 2016, concluding that such restrictions do not serve the best interests of patients. Instead, they benefit existing providers, which often have representatives serving on state CON boards.

But Dr. Singh isn’t giving up without a fight, and is challenging North Carolina’s CON law in court as a violation of the state Constitution’s Anti-Monopoly Clause.

But the legislature doesn’t have to wait to see what the courts decide.

CON laws represent a top-down approach to health care. Lawmakers should focus on bottom-up solutions that eliminate burdensome and unnecessary restrictions on access. Repealing our state’s CON law would unleash innovation and allow more providers to meet the health care needs of all North Carolinians.

Chris McCoy is state director of Americans for Prosperity-North Carolina.

Read the full op-ed HERE.