Missouri lawmakers are considering bills to study the effects of certificate of need (CON) laws through 2020 and, in the interim, close a loophole for state-operated hospitals, thereby increasing restrictions on health care providers.
Senate Bill 1076, sponsored by state Sen. Mike Parson (R-Polk County), would create a Missouri Task Force on Certificate of Need to develop “a comprehensive proposal to reform existing certificate of need law,” in part by studying other states’ regulations of long-term care facilities. The task force would be required to issue recommendations by January 1, 2020.
House Bill 2441, sponsored by state Rep. Caleb Jones (R-Columbia), would remove a provision exempting state-operated health care facilities from the requirement to obtain a certificate of need. The House approved HB 2441 on April 7 and referred the bill to the Senate Veterans’ Affairs and Health Committee, which approved SB 1076 on April 21.
History of False Reform
Patrick Ishmael, director of government accountability at the Show-Me Institute, says many CON law proposals have little to do with substantial reform.
“Unfortunately, the CON proposals that often come up in Missouri aren’t really about reform, but instead tinker around the edges of current law, either creating narrow exceptions for a special interest or else offering a patina of reform only to preserve the status quo,” Ishmael said.
Thomas Stratmann, a scholar at the Mercatus Center, says CON laws don’t increase patients’ access to higher-quality, affordable health care.
“The best CON reform is to abolish CON regulations,” Stratmann said. “More than 10 other states in the nation have no CON laws, and there is no evidence health costs are lower, quality of service is higher, or that medical care is better in states with CON laws than in states without those laws.”
More Restrictions, Less Choice
Stratmann, coauthor of a series of CON studies, including “Certificate-of-Need Laws: Implications for Missouri,” says CON reform should be aimed at increasing health care options for patients.
“More hospitals will provide more choice to potential patients and will inject more competition into the health care market,” Stratmann said.
Ishmael says Missouri should repeal its CON regulations, a decision he says would increase competition among health care providers and expand patient access to affordable care.
“Policymakers shouldn’t be trying to just fix the state’s CON law; they should be trying to end it,” Ishmael said. “We need competition in our health care [marketplace] to make care more available and affordable to patients. CON laws are an obstacle to both ends.”
Protectionism Versus Patients
Ishmael says Missouri’s CON law reflects lawmakers’ assumption government bureaucrats will make better decisions than people in a free market would.
“CON laws assume that the government has to control who can enter a health care space because, in this thinking, competition could drive some providers out of business and decrease access to care,” Ishmael said.
“But that reasoning doesn’t really hold up,” Ishmael said. “If Home Depot could get government protection and become the only home supply store that can open in the neighborhood, that would be a good law for Home Depot—and a bad law for pretty much everyone else.”
Ben Johnson ([email protected]) writes from Stockport, Ohio.
Thomas Stratmann, Christopher Koopman, and Mohamad Elbarasse, “Certificate-of-Need Laws: Implications for Missouri,” Mercatus Center, May 11, 2015: https://www.heartland.org/policy-documents/certificate-need-laws-implications-missouri
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This article has been updated.