Covid-19 Pandemic Has Shown States the Need for Fewer Barriers to Health Care

More than two-thirds of states have laws on the books, called certificate-of-need laws, that limit the ability of health care providers to offer new services, expand facilities, and invest in lifesaving equipment, including hospital beds, without approval from a CON board.    

These laws proved to be an impediment to health care access even before the COVID-19 crisis. Absent a concerted effort by many state governors to suspend these laws during the pandemic, their enforcement could have proved disastrous.   

While the Biden administration doubles down on a bureaucratic, government-controlled approach to health care, our states are empowering patients and doctors by permanently repealing portions, if not all, of our CON laws. Montana recently enacted a CON reform bill that would eliminate restrictions on chemical dependency facilities, home health agencies, and ambulatory surgery centers. 

Tennessee’s legislature, too, passed CON reform that would eliminate onerous regulations for mental health hospitals and some home health agencies. Tennessee’s reform will cut the time it takes to receive a certificate of need and the costs associated with doing so in half by streamlining the approval process. Most importantly, Tennessee’s bill stamps out cronyism in health care by preventing entrenched interests from denying competitors entrance into the marketplace.

These states are creating a blueprint for other states looking to remove needless barriers to health care. 

South Carolina, for one, has an opportunity next session to fully repeal its CON laws by passing S. 290. This is excellent news for Palmetto State patients. 

CON laws are outdated and harmful regulations in desperate need of reform. For a provider to procure a permit in order to expand facilities or purchase equipment is no easy task. An existing provider may petition the board to spike such a request, claiming that there is no “public need” for additional services, a curious choice of words to describe health care in South Carolina, in which every single county suffers from a care shortage.   

These laws don’t protect patients. They protect existing facilities from competition and lead to the creation of provider monopolies in certain areas. Put simply, these restrictions do not and cannot increase access to affordable care.   

South Carolina has some of the strictest CON laws in the nation, regulating 18 services, including home health and neonatal intensive care. 

These laws have been especially costly for South Carolina, as well. One study found that, without CON laws, South Carolina patients would have access to 34 additional hospitals, 12 new ambulatory surgery centers, 6,331 hospital beds, and up to 19 additional MRI machines. 

Patients would also suffer a lower mortality rate for a host of medical emergencies, including heart attacks, heart failure, and pneumonia. 

Some may worry that scrapping these onerous regulations could cause painful disruptions in our health care systems. But we aren’t flying blind. Twenty states waived these rules during the pandemic.   

Recognizing that the influx of COVID-19 patients would put a strain on its health care system, South Carolina Governor Henry McMaster suspended portions of its CON regime in March of last year. The quick-thinking of McMaster and other governors across the country likely saved lives during the height of the pandemic by allowing providers to expand capacity to treat patients.   

But their actions also raise an important question: If state officials saw that CON restrictions reduced provider access during this health crisis, why did we establish these laws in the first place?   

Now, as states across the country suspend and repeal their CON laws, we finally have an answer to that question. Montana and Tennessee showed the way forward for other states to scrap these restrictions for good. We urge South Carolina and others to follow their example and lead the way for more. 

David Herbst is state director of Americans for Prosperity-Montana. Tori Venable is state director of Americans for Prosperity-Tennessee.