Hospitals are among the most highly regulated institutions in America. Over the next five years or so, North Carolina and South Carolina will test two contrasting models for expanding choice and competition in this important area.
As part of an agreement last year between the North Carolina General Assembly and Gov. Roy Cooper to expand the Medicaid program, lawmakers passed a state law that would force hospitals, surgical centers and other health care providers to obtain authorization slips from the government. I played around with it. Required certificate (CON) — Opening a new location, adding new equipment, or providing new services.
as of charlotte business journal reported a few weeks ago, the Tar Heel State no longer requires CON to expand psychiatric and addiction treatment facility capacity. In 2025, surgical and imaging centers in 23 urban and suburban counties will no longer be subject to regulation.
South Carolina also enacted CON reforms in 2023. But that bill was far more ambitious. Over the next three years, the Palmetto State will eliminate virtually all of its CON requirements. By 2027, only nursing homes will be eligible.
Rob Leandro, yes, that Leandro is a medical attorney at Parker Poe.he said this journal He said North Carolina's approach to CON reform is “nuanced and more pointed,” as opposed to a “quick-fix approach.” Of particular concern to him is the fact that South Carolina's reforms apply statewide, while North Carolina's most significant changes apply only to metropolitan areas. “There is a place for CON in rural communities,” he argued.
why? This is because rural hospitals tend to operate at lower profit margins than urban hospitals. As ambulatory surgery centers and other facilities attract paying customers from rural hospitals and become more dependent on Medicare and Medicaid patients, who reimburse them for care at lower rates, quality of care declines and even closures occur. It may be possible to connect.
Anyway, that's the argument. I think it's less persuasive than others. Under a less regulated system, most investment in new facilities would be in fast-growing metropolitan areas rather than rural markets. And many states abolished their certificate-of-need programs years ago. To my knowledge, they did not experience a local health crisis as a result.
Indeed, in 2018 The Mercatus Center at George Mason University published a study on the impact of CON regulations on rural health care.. The scholars found that, contrary to standard arguments, there are states without CON regulations. tend to have more Regional hospitals and surgical centers than states that require CON. Furthermore, these anti-competition laws increase the likelihood that patients from both urban and rural areas will travel out of state for treatment, which results in lost revenue for health care providers within the state. “CON laws may not protect rural access to health care,” they conclude, “and are instead correlated with reduced rural health care access.”
More generally, new research on CON supports common sense expectations for reducing CON. Competition in healthcare The cost of care tends to rise while the quality of care declines.2020 research published in Private Enterprise Journal found that patients in CON states tended to have longer wait times for testing, hospitalization, and administration of pain medication.His 2021 research published in Journal of Health Economics found that CON regulations were associated with a 6% to 10% increase in heart attack deaths.
a Systematic analysis of all CON studies as of publication date (2020) Although the authors acknowledged that further research may be needed to reach a more definitive conclusion, they found that “the expected costs of CON exceed its benefits.”
Now, no matter what you may once say about the reforms enacted in North Carolina and South Carolina last year, there is no doubt that they are a real-world test of the strengths and weaknesses of CON reforms. North Carolina is gradually pursuing that. South Carolina is actively pursuing this. How will their disparate choices affect the price, quality, and availability of health services in rural areas? We'll soon find out.
John Hood is a director of the John Locke Foundation. his ltest book, mountain fork and people of the forest, Combines epic fantasy and early American history.
