Certificate-of-Need Is Obsolete

by Frank Mazur

There is a push for consumerism to address our high health care costs.  Given the freedom to choose health options consumers will be more cost conscious when seeing a doctor or going to a hospital.  It’s part of President Trump’s health care reform efforts.

Most states are stifling consumerism though their certificate-of- need (CON) laws.  Vermont, which is the country’s leader in CON laws, has imposed 30 laws on health providers.  Florida, which is allegedly a consumer orientated state, has 17 laws including hospital and nursing home bed allocations.

There are several respective CON studies that conclude CON laws are protectionistic, anti-competitive, and stifle innovation.  They rely on central planning and are a hidden tax on health care consumers.

When a state representative was a few years ago asked why the CON can’t be eliminated his response was “there are powerful lobbies in the State House that are protecting health industry interests.”  This focus restricts entry, expansion and competition.

Lawrence Brown, in the Journal Health, Politics, Law” says there is no evidence the CON reduces costs.  The late Senator Ted Kennedy said the CON process fosters anti-competitive behavior.  The CON process is antiquated and the Federal Trade Commission has asked states to abandon it.

CON resource allocations by government bureaucrats can’t replace private decisions by health care entrepreneurs nor can they lead to better outcomes, less costly and timelier delivery of services to consumers.  The impersonal hand of government can never replace individuals’ freedom of choice.

Frank Mazur is a former state representative from South Burlington, a former member of the EAI board of directors, and a former member of the Public Oversight Commission, which was responsible for overseeing the Certificate of Needs process in Vermont. 

{ 1 comment… read it below or add one }

Mark Shepard October 21, 2017 at 12:20 pm

CON by the government has always been obsolete. CON when done by a free market works. The minds of a few people in the bubble of politics cannot understand what is needed. They make decisions in a static world, which does not exist in reality.

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