Why N.C. should preserve its CON laws


From Pete Brunnick, CEO of Hospice and Palliative Care Charlotte Region, in response to “Ending North Carolina’s health care CON laws” (Aug. 12 Viewpoint):

The move to eliminate North Carolina’s Certificate of Need (CON) laws has gained some traction with the legislature based primarily on a belief that unfettered health care competition will increase the supply of providers, choice and access, thereby lowering health care costs. That might seem reasonable, but only if health care could operate in a free-market system where creating winners and losers among patients was an acceptable outcome.

It is important to understand why the state’s CON laws exist in the first place. The principles of certificate of need are to ensure that N.C. residents receive safe and efficient health care services that warrant public trust; that there is equitable access to timely, clinically appropriate, and high-quality health care; and that health care value is maximized for all citizens.

From these principles it is easy to see where those who favor market forces find conflict with the equanimity of CON law. That’s because the free market system does not seek to create a fair distribution of goods and services. The market follows the forces of supply and demand, guiding services to where the demand is greatest and where the largest profits can be achieved. Market optimization may be fine for consumables or commodities, but is it appropriate for health care services when decisions can mean the difference between life and death? While not perfect, North Carolina’s CON laws try to seek equal health care access, through controlled growth, so that providers may serve economically diverse populations in the least profitable markets. The state’s duty is to provide all citizens access to quality health care – exactly why the state needs a managed approach to health growth, rather than a free market system.

Savings for consumers is another argument used to eliminate CON law. While an increased supply of health care providers may decrease costs in some cases, in many situations it would have no effect or would even increase cost. Health care providers are often price takers who don’t have the ability to change what they charge.

In hospice care, Medicare and Medicaid rates are set nationally and have little immediate connection to market forces. For example, South Carolina has no hospice home care certificate of need, yet the average Medicare expenditure per beneficiary is $13,763. On the other hand in North Carolina, with its strong CON guidelines, the expenditures are only $11,562. Clearly in the case of hospice services, an open free market did not reduce costs.

Is the elimination of N.C. certificate of need laws a good thing? It could be in isolated cases. But that is only if we also desire our most vulnerable populations to receive less care, at greater expense to taxpayers.