June 10, 2016

Certificate of Need is aptly named CON. Because what’s said in defense of this government enforced, medical price fixing cartel is like a big con.

First, the North Carolina Hospital Association says CON reduces healthcare costs.

But anyone who ever took Economics 101 knows that when government CON regulations block new medical providers from entering the market to compete with existing providers, this government mandated restriction of supply will raise prices, not lower prices.

Then the hospitals say they need CON in order to cover the cost of uncompensated care for indigents. But that implies CON is generating more money for hospitals, not lowering healthcare costs like hospitals claim.

And here’s the big con on CON when it comes to indigent care. Academic research shows no correlation between CON regulations and increases in uncompensated care.

So if patients and taxpayers are paying higher healthcare costs because of CON with no increase in indigent care, who’s winning from CON?

Turn to a University of Connecticut study that finds hospital CEOS in CON states enjoy $91,000 in higher pay than their colleagues in non-CON states.

My, my, the CEOS win from the big CON. Who knew?

It’s time to lower healthcare costs by ending the big CON.