NC’s hyper-regulated health care

Only New Jersey, Hawaii, DC, and Vermont slap more red-tape on their health care providers than North Carolina does.  THAT information comes from a recent study by The Mercatus Center at Virginia’s George Mason University: red-tape-image

In the summer of 2016, New Hampshire became the 15th state to repeal its “certificate-of-need” (CON) program. This means that 35 states and the District of Columbia currently prohibit entry or expansion of healthcare facilities through CON programs. These laws, which require government permission before a facility can expand, offer a new service, or purchase certain pieces of equipment, were enacted in the belief that they would achieve several goals. 

  1. Ensure an adequate supply of health resources
  2. Ensure rural community access to care
  3. Increase the quality of care
  4. Ensure the provision of charity care to those unable to pay and for other underserved communities
  5. Encourage the use of hospital substitutes such as ambulatory surgery center (ASCs)
  6.  Restrain the cost of care

Forty years of peer-reviewed academic research—including the latest studies by researchers at the Mercatus Center at George Mason University—suggests that CON laws have not only failed to achieve their goals but have in many cases led to the opposite of what those who enacted the laws intended. 

Consider, for example, the stated aim of CON laws of increasing the supply of healthcare services. GMU professor and Mercatus Center scholar Thomas Stratmann and his coauthor Jake Russ found that CON is associated with a more limited supply of hospital beds and medical imaging equipment. In related research, Stratmann and PhD student Matthew C. Baker found that CON is associated with less utilization of medical imaging equipment among nonhospital providers. ggg

Or consider the goal of increasing rural access to care. Stratmann and Mercatus Center research fellow Christopher Koopman found that CON is associated with fewer, not more, rural hospitals.

Though policymakers didn’t originally intend CON as a quality-enhancing regulation, many advocates now contend that it might increase quality by channeling more procedures through fewer hospitals, allowing those hospitals to gain expertise. In research with Mercatus MA fellow David Wille, however, Professor Stratmann finds that CON regulation is associated with lower, not higher, quality, as measured along multiple dimensions.[…]

What this CON nonsense boils down to is making a business obtain government permission to change its business plan so as to better serve its customers. 

biggovtThere are a total of 25 different services North Carolina requires a health care provider to seek state permission for before introducing it into a market: acute hospital beds, burn care, cardiac catheterization, ambulatory surgery, Gamma knives, Home health, linear accelerator radiology, intermediate care facilities / mental retardation,  lithotripsy, long term acute care, nursing home beds, mobile hi tech, MRI, neo-natal intensive care, open heart surgery, organ transplants, PET scans, psychiatric services, radiation therapy, rehabilitation, dialysis, assisted living facilities, subacute services, and substance abuse treatment. 

We’re not talking here about regulating it all for quality or safety.  We’re talking about having to convince bureaucrats that you need to do it to serve your customers. The system is quite the smorgasbord for lawyers because all of these CON applications get challenged by the applicants’ competitors.  Instead of good old fashioned competition, you can get the state to hamstring your competitors before they even get out of the starting gate.

Politicians and bureacrats love this system because it puts them in a position of being able to (1) do “favors” or (2) lord over someone else. In the meantime, we out here in the real world suffer from a lack of local resources, a lack of choices, and government-inspired, artificially-inflated health care costs.


12 thoughts on “NC’s hyper-regulated health care

  1. One prior Democrat administration found CON a good method of political fundraising. To get a CON, a hospital had to buy it by making sufficient political contributions. If you did not arrange the political payoff, you did not get a CON. The political appointees on the SHCC got word as to who paid up and who had not. A prior Republican administration had to clean up that corrupt practice. I can only imagine how Roy Cooper would use CON for his political benefit.

    This system breeds corruption and needs a visit from Dr. Kevorkian.

  2. The hospital association was running ads on radio promoting the CON’s back during the legislative session. The ads in our area said to call and thank Rep. Szoka for supporting CON’s. I guess Szoka is just an all-round special interest guy. He is a big supporter of corporate welfare for the green energy special interest, and now for a big government assault on the free market on medical care.

    What sort of name is Szoka? North Korean?

      1. Being a supporter of big government and an opponent of free enterprise, as Szoka’s support of special interests has reflected makes me think North Korea before it does US Army.

      1. The home country of George Soros? That figures. Szoka may not have the money of Soros or anywhere remotely near it, but he has some of the political ideology of Soros. Government control and corporate welfare for the favored special interests. Yessireebob, that is the ideology of Soros and Szoka!

  3. All I know is that medical access in Western NC is ABYSMAL. I need to see a spinal neurologist and they told me there are too many patients and that I had to “wait my turn” even though I have an emergency. And I have to travel to Asheville, which is 45 minutes away by highway.!! Seven weeks to get an appointment. Angry doesn’t begin to describe it. Lots of ER visits and unneeded drugs to hold me over. Disgusting!!
    Up North, I can walk right in the doctor’s door and get treated!!

  4. If you want to lower costs and improve quality in an industry, allow free market capitalism to take hold. This works in the healthcare industry as well.
    CON is a tool inefficient hospitals use to keep physicians and nurses from branching out on their own and providing better and cheaper care to patients. It traps these professionals into the hospital system for their livelihood unless they are willing to dramatically change their practice or move to a non-CON state.
    We need to remove CON from North Carolina ASAP. We could potentially reallocate so many wasted healthcare dollars into other needs of our lives. Please keep it high on your political priorities list.

  5. It is distressing that this little cabal of NC House members have become so enthralled and greedy by the cash thrown at them. CON laws go against every single free market tenet known to man. That Szoka, Moore, Lewis, Hastings and especially Dollar (the worst on the CON issue) overlook the medical needs and deny opportunity for better care, especially in poorer areas of the state, for their thirty pieces of silver is beyond abhorrent.

    1. Yet, businesses and organizations are summarily trashed for exercising their Free Market rights to choose not to come to NC because of HB2.

      1. That is called corporate bullying and has nothing to do with the free market. A few executives of big companies abuse their positions to have the company take ideologically motivated actions which are often contrary to market principles and the corporations own financial interests. Look at what has happened to Target after some wayward execs abused their positions to pander to the perverted gender deniers. Stockholders ought to throw the rascals out!

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