States Still “CON” Patients Long After Federal Repeal

States Still “CON” Patients Long After Federal Repeal

A fully equipped surgical center in Cedar Rapids, Iowa office sits unused.  Why?  Dr. Lee Birchansky has been trying to open a new out-patient surgical center in his Cedar Rapids eye practice for almost twenty years now, but antiquated certificate-of-need laws and local hospitals have stood in the way.  These laws hurt not only Iowans like Dr. Birchansky and his patients, but Nebraskans, and citizens of 32 other states.

Certificate-of-need, or “CON,” laws were introduced in the 1970s in an attempt to control health care costs.  By requiring doctors to justify the “need” for new building projects to state officials, these laws were thought to reduce wasteful spending.  The federal government strong-armed states into adopting CON policies with entitlement money, so in 34 states today, doctors must submit certificates of need to state bureaucrats before offering new patient services.

Since then, the federal government has found that these laws do not reduce costs and has stopped bribing states into enacting them.  But while CON laws prove unhelpful, they are not without consequence.  CON laws include an exception for hospitals, so large, established health care providers need not ask permission to open new wings and offer new services, giving them an unfair competitive advantage.  Thus, Cedar Rapids already has eye surgery centers – in the hospitals.

CON laws also favor hospitals over independent physicians like Dr. Birchansky because in the approval process, state officials decide whether to approve a CON based largely on objections from other health businesses.  Every time Dr. Birchansky brought his CON before the Iowa Health Facilities Council, Cedar Rapids hospitals have disputed its “necessity” to squash the new competition Dr. Birchansky’s surgery center would bring.

The ability for hospitals to use the CON process to keep small physicians like Dr. Birchansky from providing their patients with the care they need both raises costs for patients and encumbers the doctor-patient relationship.  Successful health care depends vitally on that relationship, and CON laws mingle states and businesses to break that relationship with independent physicians, in Nebraska and across the country.

Subscribe to our weekly email to stay informed about removing barriers like certificate-of-need.

Photo by the Institute for Justice

Want more? Get stories like this delivered straight to your inbox.

Thank you, we'll keep you informed!