June 9, 2016

With a Senate Committee amending a House-passed bill naming a state cat with a repeal of the Certificate of Need Law that protects high-priced medical monopolies from competition, conservative reformers are back in the fight for lower healthcare costs.

Certificate of Need (CON) cuts competition by forcing new medical providers to go through a minefield of NCDHHS regulations and roadblocks before they can compete with existing hospitals. In fact, only Hawaii and Bernie Sanders’ People’s Republic of Vermont have more restrictive CON regulations than North Carolina.

Stopping new surgery centers from competing with existing hospitals will obviously raise prices. But while it’s good for lawyers and lobbyists protecting the incumbent providers, the higher medical prices hurt the people struggling with inflated medical prices.

Here’s what the Bush Administration found from studying CON:

”The Antitrust Division’s experience and expertise has taught us that Certificate of Need laws pose a substantial threat to the proper performance of healthcare markets. Indeed, by their very nature, CON laws create barriers to entry and expansion and thus are anathema to free markets. They undercut consumer choice, weaken markets’ ability to contain healthcare costs, and stifle innovation. We have examined historical and current arguments for CON laws. They do not provide an economic justification for depriving consumers of the benefits of free markets.”

“CON laws harm the consumers who would have chosen alternative, lower priced, higher quality, or more convenient sources of care. Indeed, as one would expect, several studies have concluded that the presence of CON regulations may be responsible for increases in healthcare costs.(30) These findings were supported by the recent study by Georgia State University conducted as part of your state’s review. That study showed that rigorous CON regulation is associated with less competitive markets and higher prices for private inpatient care.”

Based on economic studies, CON restrictions cost North Carolina patients and payers $1.5 billion a year in higher healthcare costs.

Sure, a state cat is nice. But North Carolinians need lower healthcare costs.