Son of CON: Certificate of Public Advantage

North Carolina is one of but two states to have Certificate of Public Advantage (COPA) agreements in health care provision. I discuss COPA in my newsletter today; here are snippets:

Under the theory behind COPA, excessive costs keep health care services out of rural areas, while antitrust laws prevent cooperative agreements among health care providers that would mitigate costs and thereby extend services into rural areas. In that view, such agreements should therefore be allowed and encouraged by state health planners who would have oversight of the COPA recipients. Strict state regulatory oversight of the COPA recipient would, the assumption is, effectively impose the price discipline on its services that would have been imposed by a normally functioning market.

If that sounds to you like wishful thinking, you are probably not wrong:

Since the law’s passage in 1993, North Carolina has issued only one COPA. It was in 1995 to Mission Health System in western North Carolina (WNC), which allowed Memorial Mission to merge with St. John’s Hospital — the only acute-care hospitals in Asheville — to form Mission Hospital. The COPA covers Buncombe and Madison counties.

Serious concerns have been raised over COPA and Mission Health. The largest employer in WNC, Mission has entered into numerous partnerships since 1996, expansion that has provoked criticism from other hospitals and smaller health care systems. Critics complain that the state has allowed Mission to engage in “empire building,” “predatory” practices, and threatening competing providers of services either to partner with Mission or be driven out of business (or “crushed”) by Mission duplicating those services.

A 2013 Asheville Tribune report on “The Kingdom of Mission” noted that “physicians and consumer advocates have complained that Mission mostly self-reports its COPA compliance, with little oversight from the state agencies that are supposed to police it.” It described COPA as the “hunting license” Mission uses in what critics termed a “manifest destiny-like cherrypicking of different private specialist practices so as to capture an entire spectrum of medical services under its umbrella.”

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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