Certificate of Need Laws Have Led to ICU Bed Shortages

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Posted by Margaret Mire on Friday, May 15th, 2020, 12:03 PM PERMALINK

Governors across the country are suspending regulations that slow down America’s response to the pandemic. Many of these laws, such as Certificate of Need laws, have been harmful for decades and the pandemic has made this fact painfully obvious.  

CON laws require existing and potential health care providers to get the government’s permission to establish or expand certain health equipment, facilities, or services. CON applicants spend several years and up to hundreds of thousands of dollars trying to prove there is “need” in the community for what they are hoping to offer. Imagine trying to open a new grocery store, only to be told by the authorities there is no “need” for the store.  

The coronavirus has shown the negative impact CON laws – which protect incumbent providers from competition – have had on the health care system. A recent report from the Mercatus Center at George Mason University, Raising the Bar: ICU Beds and Certificates of Need, found “states that require a CON for hospital beds are statistically significantly more likely to experience a shortage of ICU beds over the course of the COVID-19 pandemic.” The study explains:

“To be precise, there is a 13 percent chance that the average non-CON state will experience a shortage of ICU beds, while there is a 30 percent chance that the average CON state will experience such a shortage. The average non-CON state is expected to experience a shortage of 114 ICU beds (a little more than 0.5 beds per 10,000 residents) over the course of the pandemic, while the average CON state is expected to experience a shortage of over 8,000 beds (about 9 beds per 10,000 residents) over the course of the pandemic.”

Further, the study highlights that in “careful studies that control for possibly confounding effects,” researchers have found that CON laws are also associated with fewer hospitals and fewer rural hospitals per capita, fewer ambulatory surgical centers and fewer rural ambulatory surgical centers per capita, fewer dialysis clinics, and fewer hospitals offering CT, MRI, and PET scans, among other things.

CON laws are nothing more than protectionist policies that prevent patients from accessing vital medical care. To date, 35 states and the District of Columbia have CON laws, and at least 22 of these states have suspended at least part of them in response to the coronavirus.

“Governors and legislators should expand upon these ideas to further eliminate the red tape and protectionist policies that drive up costs and reduce access to health care,” explained Grover Norquist, president of Americans for Tax Reform, in a recent OpEd about the ways states are responding to the coronavirus by suspending CON laws and other government barriers to health care. “And they should make these deregulatory reforms permanent.”

Photo Credit: Wellcome Images

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