Certificates of Need Not Needed
Today, the St. Joseph News-Press reported about the efforts of an area doctor (also, incidentally, a Missouri representative) who is sponsoring legislation to get rid of Missouri’s Certificate of Need (CON) requirement for most health-care facilities — except for those providing long-term care:
Anyone in the hospital business wanting to set up shop in Missouri must endure a stringent application process with the state under a Certificate of Need program.
The same goes for long-term care facilities, such as nursing homes, and certain medical equipment, such as MRIs.
Rep. Dr. Rob Schaaf, R-St. Joseph, wants to take hospitals and medical equipment out of the equation.
“I’m just a believer in the free market and I don’t believe in central control,” Dr. Schaaf said.
Dr. Schaaf is in good company. Last year, we published an op-ed by Steve Bernstetter, "Taking the CON Out of Certificate of Need Laws," that argued in favor of largely the same perspective. Steve pointed out the drawbacks of CON laws here:
Proponents of maintaining current CON laws make two key arguments. First, they assert that CON laws keep prices down and assure both quality and availability of service. Evidence for these claims is spotty at best. Success with and without the program varies greatly from state to state, and it is extremely difficult to separate the differences in care created by CON laws from differences created by other variations in healthcare systems between states. Additional study is required before any solid conclusions can be drawn as to the affect of CON laws on price, quality, and availability. However, conventional economic wisdom holds that when multiple firms compete, quality rises and prices drop. There’s no reason to assume that the health care industry would be exempt from this effect.
He went on to propose an alternative model:
The ideal system provides a variety of options, in both price and quality, for all. Such a system is best achieved in a market where firms are free to specialize to meet consumer demand. Such a market depends on consumers with a variety of options making informed decisions. As such, CON law reforms should focus on increasing the transparency of the market while simultaneously fostering competitive growth within it. A balanced approach to competition, in which artificial barriers to entry, such as CON laws, are eliminated and the healthcare needs of all are well represented, offers the best chance for guaranteeing all Missourians access to affordable, quality health care.
