Who do you think should decide what medical treatments are available throughout the state – you and your doctors or state bureaucrats?
Unfortunately for North Carolinians, it’s currently the latter. This is thanks to the state’s outdated “Certificate of Need” laws. A patchwork of onerous laws and regulations, they require medical providers to obtain the state’s permission before adding new equipment, offering new services or opening new facilities. This places a tremendous burden on entrepreneurial-minded physicians who want to provide more care for more patients.
The good news is this may be about to change. State lawmakers are considering legislation to repeal these antiquated laws, and it should be the easiest vote of their careers. It would be a step in the direction of returning health care decisions to doctors and patients and offering more choice and lower cost along the way.
Of the 36 states with Certificates of Need, North Carolina ranks the fourth most restrictive. They cover a total of 25 devices and services in the state ranging from magnetic resonance imaging (MRI) machines to the number of hospital beds. As many medical providers can attest, obtaining the proper approvals can be more dizzying than medical school exams.
Physicians first have to submit an official “Letter of Intent,” then they have to submit the application itself. Then there’s a 30-day public comment period and a potential public hearing. And then months, or sometimes years, and thousands of dollars later they may be approved to begin helping more patients.
But even if a certificate is finally granted, medical providers still aren’t out of the regulatory woods. They are required to submit progress reports to state regulators detailing the development and operation of approved services. If they deviate from what regulators approved, they may have their certificate revoked and be forced to stop treating those patients.
If that sounds crazy, that’s because it is. Even more so in a 21st century economy, where innovation is advancing more rapidly than ever before. Rather than embrace these changes and their benefits, Certificates of Need stall progress or grind it to a halt.
Unsurprisingly, many physicians simply choose not to deal with the hassle of it all. And as abundant evidence shows, the ultimate result is fewer patient options and higher costs.
A recent study by the Mercatus Center at George Mason University put this into perspective. It found North Carolina’s Certificates of Need have resulted in nearly 13,000 fewer hospital beds, 49 fewer hospitals offering MRI services and 67 fewer hospitals offering computed tomography (CT) scans.
By limiting the supply of health care in the state, Certificates of Need also drive up total costs. According to data from the Kaiser Family Foundation, states with these laws have 11 percent higher per-capita health care costs than those that don’t. And a study published in the journal Medical Care Research and Review found health care costs for major procedures are four percent higher in Certificates of Need states.
Even the Federal Trade Commission agrees. In comments to state Rep. Marilyn W. Avila last month, the FTC wrote North Carolina’s Certificates of Need “can prevent the efficient functioning of health care markets” in ways that “limit consumer choice, and stifle innovation.” One commissioner went a step further, encouraging full repeal of all Certificates of Need laws.
That’s exactly right. And it should be a no-brainer for legislators who want to lower costs and provide patients more choice. They always speak of putting doctors and their patients back in charge of health care – now they have a chance to make good on their word.
Nathan Nascimento is a senior policy advisor for Freedom Partners Chamber of Commerce.