April 1, 2020
By Naomi Lopez and Christina Sandefur
As Missouri gears up for an anticipated surge of COVID-19 patients, Governor Mike Parson is taking some positive steps to shore-up the state’s hospital preparedness, such as allowing qualified doctors and nurses in other states to help in person or via telemedicine during the crisis.
But there is more that he has the authority to do to ensure that the state is well-prepared. Among the highest of priorities is ensuring that there is ample ability to care for critical care patients, but unfortunately, previously existing Missouri state laws threaten to block efforts to rapidly ramp up critical care hospital bed capacity.
Missouri’s certificate of need (CON) laws require the Missouri Health Facilities Review Committee’s stamp of approval before new facilities can be established or can expand health care services, like increasing bed capacity or acquiring MRI and PET scan technology. In other words, these laws prohibit new facilities or existing ones from expanding if the Committee determines that existing facilities are sufficient to meet an area’s “needs.” And that decision can turn on the claims of any “affected person,” which means the facilities that are already serving in that area — i.e., the would-be competitors.
These decades-old laws were established in an effort to control costs at a time when medical services were paid for by funding facilities rather than in exchange for services provided. But multiple states abandoned CON laws when it became clear that they actually drove up health care costs, lowered quality, and limited the availability of needed services. Yet these laws persist in Missouri — and may now be an obstacle to nimbly and efficiently responding to the coronavirus crisis.
Unfortunately, these arcane laws have limited the number of hospital beds across the state. According to research from the Mercatus Center, “for Missouri these programs could mean approximately 7,943 fewer hospital beds.” That’s bad news for patients under normal circumstances, but it could be critical in the midst of this pandemic.
Indeed, the total negative impact of CON laws on health care in Missouri is unknowable. In addition to the applications to serve patients that are denied by the Committee, an untold number will never be filed in the first place due to the high cost of filing for a certificate of need. State application fees start at $1,000, and the process can easily cost tens of thousands between government fees and payments to private consultants, with no guarantee that the Committee will even grant the certificate.
Missouri’s political leadership shouldn’t wait any longer to act. In these times of great uncertainty, one thing is clear: These crony laws artificially prop up hospitals’ bottom lines at the expense of public well-being and preparedness. It is an extreme injustice to allow these laws to remain on the books simply to benefit industry insiders.
Missouri lawmakers have both the authority and the duty to put patients and the frontline healthcare workers who care for them first. Repealing these damaging certificate of need laws is an important place to start.
Naomi Lopez is Director of Healthcare Policy at the Goldwater Institute. Christina Sandefur is the Executive Vice President at the Goldwater Institute and author of the recent Federalist Society paper Competitor’s Veto: State Certificate of Need Laws Violate State Prohibitions on Monopolies.