Contrary to 40 years‘ worth of evidence, The American Hospital Association says that Certificate of Need (CON) is a necessary and effective law that restrains the rise in health care expenditures and an over investment of scarcely used services. To prevent a medical arms race, state bureaucrats should be responsible to determine the appropriate amount of equipment and facilities such as MRI machines and operating rooms.
For example, it is often the case in which multiple health systems submit competing applications to win approval by the state for a capital project that is considered ‘needed’. In the end, there will be a winning applicant and losing applicants.
That, in a nutshell, is how the law is supposed to clamp down on a medical arms race.
However, the CON process doesn’t stop there. Competing applicants can appeal an approved application. This results in patients being denied from accessing health care needs sooner or in a more convenient setting.
What makes this law even more messed up is that non-competing applicants can step in. Years ago, Triangle Orthopedic Associates (TOA), North Carolina’s largest private orthopedic practice, and Duke University Health System filed competing applications for an MRI machine. TOA ended up winning the bid. While Duke didn’t petition against the decision, a separate company, Alliance Imaging, did. It had previously provided MRI services to TOA and feared the loss of business that would result if TOA procured its own machine.
