June 5, 2020

At the height of an unprecedented global healthcare crisis, you may be surprised to learn that most states have laws on their books that require healthcare service providers to get permission from their own competitors before helping patients. So-called certificate of need (CON) laws supposedly exist to control healthcare costs. But do they achieve that goal? I explore that question in a new Federalist Society Regulatory Transparency Project video.

As I explain in the video, we now have decades of data showing that CON laws drive up costs, lower quality, and limit access to care. So what do these laws accomplish, then? They protect existing businesses at the expense of new providers—and the public health. In recent years, entrenched interests have been able to block state-of-the-art surgical centers, critical diagnostic equipment, and facilities to treat mental health issues and addiction, even in the face of overwhelming demonstrated need.

The special interests that benefit from these laws invest a lot of time and resources in ensuring they stay on the books. But there may be hope in the courts. Some state constitutions make it illegal for the government to restrict economic competition by creating monopolies. And that’s exactly what CON laws are: state-sanctioned monopolies that bar people from serving patients. 

As Americans struggle with rising healthcare costs, the time is right for courts to enforce state constitutions to stop politically well-connected businesses from blocking the competition that lowers prices and improves services in every other area of the economy. Doctors and healthcare providers should have the freedom to run their practices in ways that best serve their communities—without having to get their own competitors’ permission to offer better, less expensive care.

Christina Sandefur is Executive Vice President of the Goldwater Institute

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