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White House Competition Report Highlights Certificate of Need Laws

January 24, 2019

The Trump administration released a new report, “Reforming America’s Healthcare System Through Choice and Competition,” which outlines a series of free-market health care policy solutions.

The report—a collaboration between the Departments of Health and Human Services, Labor, and Treasury—focuses on state-based reforms that will lower health care costs and increase quality. Among the reforms mentioned in the report, the administration cites repealing “certificate of need” (CON) laws as a major step to increase health care competition.

Nanny State

Matthew Glans, senior policy analyst with The Heartland Institute, which publishes Health Care News, says CON laws force health care providers to acquire permission from state boards to expand and build new facilities. Glans says this raises the cost of health care services and leads to monopolies by providers.

“CON laws are regulatory overreach that prevents competition in the health care marketplace,” Glans said. “Less competition means higher prices for patients. CON laws also exacerbate the problem of access to health care because they push physicians who might want to enter a market out of contention. CON laws are frequently costly barriers to entry, rather than the successful tools used to control costs or improve the quality of healthcare advocates of those laws claim they are.”

Nanny No More

The White House report shows that CON laws harm consumers because they lead to higher health care prices and fewer choices. The report introduces dozens of policy proposals—including repealing CON laws—that would reduce the skyrocketing cost of health care.

According to the report, fifteen states have abolished CON laws altogether, while some are being scaled back. Others will be sunset over time.

In a statement on the report, White House officials described the portion dealing with CON laws as an attempt to reintroduce competition and choice back into the health care sector.

“This report makes several recommendations to promote choice and competition in provider markets, including state action to repeal or scale back Certificate of Need laws,” according to a Trump administration official. “Encouraging the development of value-based payment models that offer flexibility and risk-based incentives for providers, especially without unduly burdening small or rural practices.”

Jake Grant (jakeg42294@gmail.com) writes from Alexandria, Virginia.

INTERNET INFO:

“Reforming America’s Healthcare System Through Choice and Competition,” U.S. Department of Health and Human Services, December 3, 2018: https://www.hhs.gov/about/news/2018/12/03/reforming-americas-healthcare-system-through-choice-and-competition.html

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