Editor’s note: This is one installment in a One Small Step series exploring how our founding principles apply to policy change movements. See the series introduction and full collection here.
Two hundred and fifty years ago, our Founding Fathers declared that all people possess an unalienable right to the pursuit of happiness. Our country was created with the idea that everyone has the right to live their life, choose their own work, and better themselves how they see fit without interference from the government. It is hard to imagine they’d recognize a country where a government board has the power to decide whether a health care provider can open their doors and put their skills to work in their own community — yet that’s exactly what certificate of need (CON) laws do in 35 states and the District of Columbia.
CON laws are state regulations which require health care providers to obtain approval from a state government board to establish or expand health care facilities, services, and equipment. These certificates are essentially a government-mandated permission slip that individual health care providers, physician groups, hospitals, and health systems must obtain before they are legally allowed to care for patients. Essentially, CON laws empower bureaucrats to decide what health care services are offered, instead of that decision being driven by patients’ needs.
States didn’t come up with CON laws on their own — they were forced to adopt these overbearing regulations by the federal government. Following the theory of a misguided economist, federal legislators believed that by limiting the supply of health care services they could reduce health care spending. In 1974, by threatening to withhold Medicaid and Medicare reimbursements, the federal government was able to coerce every state into passing a CON law of their own. Our founders would rightfully be appalled to see how far our government at both the federal and state levels have strayed from the promises they made in the Declaration of Independence.
Twelve short years later, after learning that supply controls don’t lower prices (something economists have seemingly always known), the federal government began pleading with states to repeal their CON laws. For the last forty years, every single presidential administration has made this ask of states. More than half still haven’t listened, proving that laws are much easier to enact than they are to repeal because once government acquires power it seldom surrenders it.
But CON laws don’t give power just to the state governments — this regulation heavily favors incumbent providers and large hospital systems who are much more adept at navigating the bureaucracy, allowing them to take over the market and create monopolies. This level of market control hurts both patients and providers while we are in a nationwide shortage of health care.
CON laws keep entrepreneurs and small businesses out of the market by making the barrier to entry too high for them to overcome. Health care providers such as doctors and nurses are then left with limited options in where to work. And with an artificially restricted supply of health care, patients are faced with long wait times, high prices, and fewer choices in where they receive their care. The only winners are state governments, which collect the fees, and incumbent providers, who get to keep their market share without competing for it.
Our Founders didn’t fight for a government that decides who gets to work and where. They fought for a country where people are free to put their skills to use, build something of their own, and serve their communities without asking a bureaucrat for permission first. Repealing CON laws is a small but meaningful way to honor their promise. As we celebrate 250 years of independence, it’s time states let that freedom ring in health care, too.
Sofia Hamilton is a Senior Health Policy Analyst at Americans for Prosperity.
