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To improve access to healthcare in the US, get rid of Certificate of Need Laws
Steve Forbes, chairman and editor-in-chief of Forbes, recently released a video calling for citizens and local groups to “demand their legislators get rid of” Certificate of Need (CON) laws. Currently, 35 states and Washington, D.C. still have CON laws on the books.
Forbes outlines the flawed CON approval process that requires special government permission for private health care providers to build new hospitals or expand the services they offer. Additionally, Forbes explains how CON laws disrupt competition in the healthcare market and limit access to care while increasing costs for consumers.
Steve Forbes, chairman and editor-in-chief of Forbes, recently released a video calling for citizens and local groups to “demand their legislators get rid of” Certificate of Need (CON) laws. Currently, 35 states and Washington, D.C. still have CON laws on the books.
Forbes outlines the flawed CON approval process that requires special government permission for private health care providers to build new hospitals or expand the services they offer. Additionally, Forbes explains how CON laws disrupt competition in the healthcare market and limit access to care while increasing costs for consumers.
Just a moment...
Posted from cfif.org
Healthcare
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Competition
Medical
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Edited >1 y ago
Posted >1 y ago
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Why would legislators want to dissolve the CON laws, they would be losing money that is given to them under the table ma'am Lt Col Charlie Brown
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Didn't know much about this process and dug a bit into it after reading the article. Found out that it's not just Forbes and Kaiser that think they are bad idea. Back in 2017 when Alaska was considering the repeal of their CON law, the FTC and DOJ issued a joint statement* in support of the repeal and testified* on behalf of that initiative.
CONs started out with a noble purpose - prevent overbuilding, encourage collaboration, ensure access to care and controlling healthcare costs. However, from what I read, most think they have just become a arbitrary bureaucratic control mechanism by the state's regulatory control agency that restricts competition, stifles innovation, causes an administrative burden (time and cost) and are ineffective in controlling healthcare costs or improving the quality of care.
The closest analogy I could think of with CONs is a taxi medallion in a city. Medallions could cost taxi drivers hundreds of thousands of dollars in order to buy one because they were strictly controlled, in high demand, and were regulated by the local government.
When ride-sharing services (such as Uber and Lyft) became prominent, they drove the costs of taxi medallions down tremendously (in some cities, the value of taxi medallions has dropped by as much as 90% since the introduction of ride-sharing services) because you didn't require a medallion, lower cost for ride-share, convenience, and better customer service due to a rating system.
Maybe we need the equivalent of ride-sharing services for the health industry. I don't know what such a thing would look like, but it's food for thought.
Oh ... and get rid of, or revamp, CONs - the current implementation is past their time.
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* https://www.ftc.gov/news-events/news/press-releases/2017/04/ftc-doj-support-reform-alaska-laws-limit-competition-health-care-sector
* https://www.ftc.gov/news-events/news/press-releases/2018/02/ftc-staff-testifies-favor-effort-repeal-alaska-laws-limit-competition-health-care-sector
CONs started out with a noble purpose - prevent overbuilding, encourage collaboration, ensure access to care and controlling healthcare costs. However, from what I read, most think they have just become a arbitrary bureaucratic control mechanism by the state's regulatory control agency that restricts competition, stifles innovation, causes an administrative burden (time and cost) and are ineffective in controlling healthcare costs or improving the quality of care.
The closest analogy I could think of with CONs is a taxi medallion in a city. Medallions could cost taxi drivers hundreds of thousands of dollars in order to buy one because they were strictly controlled, in high demand, and were regulated by the local government.
When ride-sharing services (such as Uber and Lyft) became prominent, they drove the costs of taxi medallions down tremendously (in some cities, the value of taxi medallions has dropped by as much as 90% since the introduction of ride-sharing services) because you didn't require a medallion, lower cost for ride-share, convenience, and better customer service due to a rating system.
Maybe we need the equivalent of ride-sharing services for the health industry. I don't know what such a thing would look like, but it's food for thought.
Oh ... and get rid of, or revamp, CONs - the current implementation is past their time.
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* https://www.ftc.gov/news-events/news/press-releases/2017/04/ftc-doj-support-reform-alaska-laws-limit-competition-health-care-sector
* https://www.ftc.gov/news-events/news/press-releases/2018/02/ftc-staff-testifies-favor-effort-repeal-alaska-laws-limit-competition-health-care-sector
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Lt Col Charlie Brown
I remember that situation with the taxis...and they have the same one in London
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From what I can tell, these laws do not prevent existing hospitals from opening a new location. It is still the same "hospital" just with multiple branches.
All that does is re-inforce monopolies.
The city I work in has ONE hospital - with three locations. If yiu and that hospital have a dispute (say over billing procedures) then you cannot get hospital care in town. Urgent care for you, and if you need surgery hit the road for a 1 hour drive. If it is a true emergency, hope the ambulance makes it in time!
(Yes, that is hyperbole, they cannot refuse to treat true emergencies).
Oh, and the one hospital now refuses to take state health insurance (Medicaid).
One of the biggest urgent care providers runs hospitals in a different part of the state. They have the capability of establishing a competing hospital. But have not been allowed to.
But hey, CON laws are great!
All that does is re-inforce monopolies.
The city I work in has ONE hospital - with three locations. If yiu and that hospital have a dispute (say over billing procedures) then you cannot get hospital care in town. Urgent care for you, and if you need surgery hit the road for a 1 hour drive. If it is a true emergency, hope the ambulance makes it in time!
(Yes, that is hyperbole, they cannot refuse to treat true emergencies).
Oh, and the one hospital now refuses to take state health insurance (Medicaid).
One of the biggest urgent care providers runs hospitals in a different part of the state. They have the capability of establishing a competing hospital. But have not been allowed to.
But hey, CON laws are great!
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