Repeal Certificate of Need? You’ve Been Conned

Certificate of Need (CON) laws are a con and should be fully repealed, right?  Actually, no – and the very foundation of the statement is a L.I.E. (lacks ingenuity & evidence). See, we can be clever with words and abbreviations, too – but why be petty when it’s easier to just tell the truth?  

For far too long the narrative around CON has been defined by a standard of marketing that is no higher than that of the drive-time ads that appeal to us about our dinner plans. Nuance may not be a two-for-one special, but it is more filling and satisfying. 

The only con in this scenario is the one being attempted on your better judgment. Let’s look more closely. 

What’s the real story behind CON?  

CON laws reduce health care costs for patients by avoiding unnecessary expansion or duplication of services and preventing oversupply that can lead to higher costs and exacerbate labor shortages. Critically, the existing laws help maintain access to services for historically underserved populations and communities, especially in rural areas. Unlike other states that have repealed CON, North Carolina has more equitable hospital bed distribution across various types of mid-sized communities, including rural-suburban, suburban, and large suburban areas. 

The evidence is clear: across the country, erosion of CON has led to rural hospital closings and threatened essential services, including labor and delivery, behavioral health, and emergency services.    

What about the free market? Isn’t competition good for health care costs? 

Glad you asked – our state is an ideal incubator for health care innovation, and we should support pathways to lower costs and increase access to care in all communities. But repealing CON won’t get us any closer to realizing that goal. The end result of a flooded market may actually increase health care provider consolidations, with service availability determined more by geography than need.  

Health care also doesn’t operate in the same free market environment as other industries. In some cases, facilities and providers have legal obligations to treat patients regardless of their ability to pay. For example, hospitals with emergency departments are federally required to examine and provide stabilizing treatment for anyone who walks through their doors seeking emergency services. CON protects access to these essential services when market forces alone might not support it, especially since insurance reimbursement rates for these services don’t always cover the full cost of care.  

Changes to CON threaten to increase instability across the health care market during a time of already great uncertainty, due in no small part to decisions being made at the federal level to cut federally-supported, state-implemented health care programs.  

Haven’t there already been recent changes to CON laws in North Carolina? The system didn’t collapse. 

Yes – and let’s focus on the word “recent.” North Carolina has not yet implemented the most recent significant changes to CON laws from the 2023 Access to Healthcare Options Act (SL2023-7), where several CON reforms were made as part of a compromise deal to enact and fund Medicaid expansion.  

It’s possible that the impact of these reforms won’t necessarily lead to short-term chaos and negative disruption of our health care ecosystem. But we can’t say that for sure, and neither can anyone else. Time and data are needed to properly assess impacts so we can calibrate expectations and determine whether further modifications are necessary. Additional reforms or repeal without first understanding how these changes affect care access would be inappropriate – and irresponsible. 

What now? 

If you’re still not convinced, we’ll add something that, intuitively, you already know very well: This is an incredibly complex issue – and health care is a unique industry. Not even the typical rules of supply and demand apply. Demand is omnipresent and supply is affected by far more variables than just proximity of facilities. To that end, if we aren’t careful about supply growth, there is every chance it will concentrate itself in places with the least operational risk, not necessarily those with the greatest need – and CON laws help prevent that. 

So, we close with a return to some word play – we have every confidence that there are constructive solutions outside of fully repealing CON to improve care delivery and access. But we also must be conscientious about all the factors in play. 

It’s a conversation we’re ready to have. Let’s do it right. Let’s be deliberate. For all North Carolinians.