This September, the Carolina Public Press released an investigation that found that since 2020, more than 1,100 hospital beds promised in North Carolina remain undelivered. Competing hospitals have challenged the state’s approvals, trapping the beds in a seemingly never-ending court spiral. Sadly, for the families of North Carolina patients, the state’s certificate of need (CON) laws make this possible even after North Carolina’s own Supreme Court predicted and tried to prevent these sorts of problems over 50 years ago.
In 1971, North Carolina passed its original CON law. Under its provisions, the state’s Medical Care Commission denied Aston Park, a 50-bed nonprofit hospital in Asheville, the authority to replace its aging building with a larger facility. Aston Park argued that needing the commission’s blessing before expanding gave hospitals already in operation an exclusive monopoly advantage. In 1973, the North Carolina Supreme Court agreed, noting that Article I, Section 34 of the North Carolina constitution declares such monopolies contrary to “the genius of a free state.”
One year later, the federal government rendered the North Carolina Supreme Court’s decision moot. In 1974, Congress coerced states into implementing their own CON laws by tying the legislation to federal health funding. Like every state, North Carolina conceded and reinstated CON regulations in 1978, this time with language tailored to avoid court scrutiny. Congress repealed its own mandate just 12 years later, finding what was already known: supply controls don’t restrain spending. Despite the federal repeal, North Carolina and many other states kept their CON laws in place.
Today, North Carolina requires CON approval for 23 categories of health care services, with its stringency only exceeded by Hawaii, Vermont, and Kentucky. Each year, the Department of Health and Human Services (DHHS) publishes its State Medical Facilities Plan after running a formula to determine the need for hospital beds by county. Officials in Raleigh decide the demand for acute care. But without the price mechanisms or information that comes from exchange required to determine demand, these government bureaucrats are essentially just guessing.
Those guesses can fall short, too. Rep. Mike Schietzelt wrote recently in the News & Observer that Wake Forest’s zip code alone has approximately 90,000 residents. Yet he says the state has denied applications for a 50-bed facility there two years in a row; a sign the formula misjudges what need looks like, which only stands to hurt patients seeking care.
Buncombe County provides a glimpse into how incumbent hospitals weaponize CON even when the bureaucrats’ guesses mirror reality. In January 2022, the State Medical Facilities Plan determined the region needed 67 more acute care beds. DHHS awarded all the beds that November to AdventHealth for a new hospital in Weaverville, which was also intended to serve rural Madison and Yancey counties. Within the month, Mission Health and Novant filed appeals, freezing the certificate for three years until the case was tossed out. The Weaverville hospital is now set to open in 2028, six years after the increased need was identified. In that time, one Mission Health facility in Buncombe ran a 99.7% average occupancy in 2025, far exceeding the state’s 78% target. Aston Park was right. CON gives incumbents an advantage, and the competitor’s veto lets them appeal a rival’s approval to keep them out of the market.
Courts rarely call these competitor’s veto appeals frivolous. State Sen. Jim Burgin, Chair of the Senate Health Care Committee, says the CON process alone takes two years and $500,000 in legal fees. Twelve of the fourteen approved bed projects in the state drew appeals in 2025. In Wake County alone, 337 approved beds sit unbuilt. Because state law already lets DHHS withdraw certificates from holders that miss their development timetable without good-faith efforts, the holdup is rival appeals. As Sen. Benton Sawrey, the sponsor of last year’s repeal bill, put it, “the only people winning are lawyers that litigate these issues.”
The North Carolina Healthcare Association posits that CON protects rural hospitals functioning on the margin. In reality, CON restricts supply, hurting rural communities as it fails to keep these hospitals open. Since 2010, North Carolina has lost eight rural hospitals, and a 2020 survey found that nearly a third of what is left is at risk of closure. Two of these facilities, Angel Medical Center and Blue Ridge Regional, belong to the same Mission system that spent three years blocking AdventHealth’s Weaverville hospital. Just south, South Carolina shows the alternative. In 2023, it repealed almost its entire CON program, leaving only nursing homes under review. States like South Carolina that removed CON requirements for surgery centers saw rural access more than double. The Mercatus Center suggests that full repeal could add nine new rural hospitals in South Carolina. While Columbia is letting the market work, Raleigh remains in the burdensome past.
State legislators already know that the law is archaic. Senate Bill 370, which would end CON review entirely, passed the Senate 31 to 17 last year and has sat in the House ever since. It is beyond time North Carolina finished what its own Supreme Court started in 1973, before Washington got in the way.
Liam Childers is a policy associate at Americans for Prosperity.
