Stethoscope and money

National Recognition in Forbes for N.C. CON Reforms

Patrick Gleason of Americans for Tax Reform highlights in a Forbes column North Carolina’s successful effort to loosen certificate-of-need restrictions.

As Texas demonstrated this past summer, the national media loves to cover state legislation related to election law and abortion. What doesn’t get as much press, though it is deserving of it, is the way in which Democrats and Republicans in many state capitals are working together this year to expand access to health care by reducing or repealing certificate of need requirements, which are regulatory barriers that impede growth in the supply of health care and inflate costs.

The latest example of such bipartisan cooperation comes from North Carolina, where Governor Roy Cooper (D) signed Senate Bill 462 into law on August 30. SB 462, which was approved with bipartisan support in both chambers of the North Carolina General Assembly, raises the value threshold above which a state issued certificate of need (CON) is required for the installation of new medical equipment. SB 462 also establishes a time frame under which a CON must be approved or denied.

The way CON regulations work is that health care providers who want to expand existing medical services or offer new ones must first prove to state regulators that there is a need. Those tasked with granting a certificate of need include competing health care providers, creating an inherent conflict of interest. It would strike many as crazy to require that any time McDonalds wants to open a new location it must seek permission from the local Burger King, but that’s analogous to the way in which CON regulations work. …

… Of the 35 states with CON requirements, governors in 24 of them temporarily suspended CON mandates in 2020 after the onset of the pandemic. While the problems caused by CON requirements have become more evident during the pandemic, there is also growing recognition among state legislators that these regulations have adverse effects outside of a pandemic and should thus be permanently repealed. The logic behind efforts to make these temporary suspensions permanent is, if a CON requirement is unduly restricting the supply of health care in an emergency, it must also be artificially limiting supply during normal times and unnecessarily driving up the cost of care.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...