Why must hospitals “battle” to expand in Wake County?

That’s the headline from the N&O: “Hospitals begin battle to expand in Wake County.” From the article:

Three hospital systems will submit proposals with state regulators today, seeking permission to expand in Raleigh, Cary and Holly Springs.

WakeMed, Rex Healthcare and Novant Health will file so-called Certificate of Need applications, vying to win approval to add 101 new hospital beds that regulators have determined Wake County will need to keep up with increasing demand.

Three businesses seek to expand. And they’re hospitals, for heaven’s sake. With health care at the fore of debate, you’d think hospitals wanting to provide more beds to a fast-growing community would be a no-brainer. Let ’em grow!

Well, no brains are the culprit behind why these hospitals are “vying” — that is, competing against each other — to win regulatory approval. North Carolina has these Sovietesque Certificate of Need laws. The business is forced to obtain from the government an official document certifying that there is a “need” for another hospital bed, another medical machine, another hospital wing, whatever.

State analysts will review the proposals during the next five months based on factors such as cost, quality of care and access to care. The state keeps tight limits on major medical projects in an effort to control health costs.

The only way such a scheme controls costs is to make receiving hospital care more expensive. Supply curves slope upwards.

Jon Sanders / Research Editor and Senior Fellow, 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...