NCPA - National Center for Policy Analysis

CON Laws Limit Patients' Access to Life-Saving Exams

October 16, 2014

States should be itching to get state-of-the-art medical devices into their hospitals, but 36 states have laws on the books that keep new and improved equipment, as well as new hospitals, out. Thomas Stratmann, economics professor at George Mason University, and attorney Darpana M. Sheth explain how they work.

Certificate-of-need (CON) laws exist in a majority of U.S. states. In short, they prohibit health care providers from offering new services or new medical equipment without approval from the state. Unless a proposal can show that an area needs the proposed equipment or services, it is unlikely to be approved.

The idea behind the laws was that they would cut costs and lead health facilities to provide more charity care. Many existing hospitals and facilities have rallied behind these laws, as they serve to keep competition out of the marketplace. Other supporters claim that the laws keep costs down by reducing duplicative equipment and services in an area that, they contend, might have no need for it.

CON laws do not work this way in the real world, explain Strattmann and Sheth; they leave areas with fewer hospitals and fewer hospital beds than they would otherwise have, and areas with CON laws are slower to adopt new medical technology. As for charity care, a study from the Mercatus Center confirms that the laws only raise costs and do nothing to provide additional services for low-income patients.

Sheth is an attorney for Dr. Mark Baumel, a physician who sought to open medical facilities in the state of Virginia that would offer "virtual colonoscopies" -- a new medical imaging technology that is less expensive and less invasive than a traditional colonoscopy. (A virtual colonoscopy, Stratmann and Sheth note, is what President Obama had during his own physical exam.) Unfortunately, despite the procedure being recommended by the American College of Radiology -- and despite 50,000 Americans dying from preventable colon cancer every year -- Americans across the country lack access to the procedure thanks to CON laws.

Source: Thomas Stratmann and Darpana M. Sheth, "Health Care Cartels Limit Americans' Options," USA Today, October 14, 2014. 


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