NCPA - National Center for Policy Analysis

NO MORE CERTIFICATE OF NEED

March 2, 2006

Washington's Certificate of Need (CON) law -- which limits the supply of medical facilities in an attempt to cap rising health care costs -- should be repealed, says John Barnes, of the Washington Policy Center.

In 1982, the federal government acknowledged the failure of CON laws, and since then 14 states have eliminated their CON requirement; however, Washington, along with 37 other states, including the District of Columbia, still require government permission to open, expand or modify most kinds of health care facilities.

But, CON no longer serves Washington's public interest, says Barnes; in fact, costs continue to rise every year in excess of inflation and the law prevents providers from adapting to the changing health needs of the community:

  • Studies in 1999 and 2005 show that Washington's CON laws have neither reduced the cost of nor increased access to health care.
  • In 2004, the Federal Trade Commission and the Department of Justice came to the same conclusion, and suggested that in some states CON laws have contributed to higher health care costs by reducing supply and stifling competition.
  • Therefore, CON laws result in the opposite of their intended purpose, by actively blocking citizens' access to health care choices and to modernize health care facilities; they also bog down health care providers in stacks of regulation and paperwork.

The only solution is for Washington to join the 14 states -- including California, Texas, and Pennsylvania -- that have repealed CON regulations; disaster did not follow repeal in those states, and it will not follow in Washington, says Barnes.

Source: John Barnes, "The Failure of Government Central Planning: Washington's Medical Certificate of Need Program," Washington Policy Center, January 2006.

 

Browse more articles on Health Issues