Alabama Should Repeal Certificate of Need Laws

Published May 26, 2021

As America moves closer to the end of the COVID-19 pandemic, 2021 could serve as a platform for long-overdue health care reform.

In many ways, the past year gives reason to expand upon successful health care initiatives like the expansion of telehealth.  When patients were unable to see their doctor in person during the height of the COVID-19 pandemic, telehealth supplemented in-person visits with virtual appointments.

On the other hand, the COVID-19 pandemic also highlighted the many flawed policies that limit access to affordable, quality care, one prime example being certificate of need (CON) laws. 

States that enforce CON laws require a certificate of need for a wide variety of health care expenditures, which includes large-scale projects like facility expansion and even the number of beds and ventilators a hospital can have.

CON laws, the epitome of central planning, require approval by a state board or commission to determine need in the marketplace. This approval is often biased toward established industry leaders, resulting in government determining winners and losers. Unfortunately, this often means reduced competition in the medical market and less innovation. 

It is important to note that 24 states suspended some aspect of CON laws during the darkest days of the COVID-19 pandemic. The simple goal of the suspension was to allow hospitals to provide necessary protective equipment and services for patients with COVID-19.  If these outdated laws had not been lifted, hospitals would have had to go through a costly, lengthy, bureaucratic process and wait for approval from the state to meet the needs of COVID-19 patients.

This raises the question: if CON laws weren’t needed during the greatest health care crisis of my life, why are they needed at all? 

Alabama resident Dr. Nancy White is right to question the necessity of CON laws in the Yellowhammer State.  In 2020, Dr. White was denied CON approval to open a 16-bed recovery center.  This facility is desperately needed in Arab, a town south of Huntsville, Alabama.  The purpose of the center was to assist patients with drug and alcohol treatment. According to a recent report by the U.S Census Bureau, more than 42 percent of Americans reported symptoms of anxiety and depression, an 11 percent increase from the previous year.

What better time to open a facility to address mental health needs than during a global pandemic when suicide and substance abuse are on the rise?  According to the Alabama State Health Planning and Development Agency, the time is never. 

Unfortunately, that isn’t a one-off situation, and patients end up losing out when government is allowed to put arbitrary restrictions on the health care market.

Currently, 35 states still enforce CON laws, which result in higher prices and reduced availability of medical equipment and hospital beds. 

According to a Mercatus Center report, Alabama could reduce total health care costs by $203 per person if these outdated laws were repealed.  The negative effects of CON are passed on to consumers by hindering competition and forcing providers to use older facilities and equipment.  CON allows cronyism to run rampant while government plays favorites with established industry leaders.   

Henry Ford said it best: “Competition is the keen cutting edge of business, always shaving away at costs.”

The best step lawmakers could take would be to repeal CON laws permanently.  If this is not possible, policymakers should at least limit the application of CON restrictions to only large-scale projects. 

[Originally posted on American Thinker]