There are a myriad of reasons that health care costs are sky high. Every cause shares a common genesis – government. From the World War II era tax benefit of allowing tax-free employer sponsored plans to state imposed price controls (Medicare/Medicaid) to today’s outright subsidies (Obamacare), it has been a 70+ year slow motion train wreck that has annihilated anything remotely resembling a “free” market in health care. However, today I want to focus on but one sliver of that regulatory quagmire: Certificate of Need (CON) laws. When I first learned about these I honestly thought I was reading satire – this is America after all! How can such monstrosities of law exist? And yet they do. For those unaware, CON laws basically allow one or more local hospitals to have a say in whether a prospective hospital may be permitted in their “backyard.” It’s like if McDonalds had a vote in whether any new fast food restaurants could be built within say 30 miles of their location. What do you think McDonalds’ choice would be? This is nothing but state backed protectionism, pure and simple. And like all protectionism it harms consumers while benefiting the protected class (unions, taxi drivers, any tariff protected industry, etc.) But please, tell me more about this free market in health care we have.
Supporters of CON laws try to appeal to ones sense of “fairness” by claiming that if these mean old private hospitals come in why they’ll “steal” patients from our poor old public hospital by only offering the most lucrative and profitable services leaving the extant hospital with money losing care and indigent patients. Hogwash. In other words they are saying that in terms of those “lucrative” services they can’t compete because they are in fact overcharging for their “lucrative” services in order to subsidize the money losing services. In other words they don’t know how to properly run a (hospital) business and are afraid of someone coming in and competing with them that does.
Ludicrously, these same people will turn around and decry the “monopoly” of a company like AT&T or Microsoft or Google or Apple and claim “why we need to break them up, don’t you know monopolies are bad and that competition lowers prices and helps consumers?” But then will unironically tell you that monopolies in hospital services makes perfect sense and why don’t you just trust the guy telling you he doesn’t need competition to give you a fair price? I guess state backed monopolies are “a ok” (schools, courts, police, utilities, roads, etc.)
Ironically many of these people who support CON laws are “conservative” Republicans! Indeed there was a recent Bill 198 in the Georgia House that died in that Republican dominated chamber. One representative quipped in a local paper
“I was very happy to help kill the elimination of the CON process that would hurt local hospitals.”David Belton
R – Buckhead, GA, District 112
Wow, give that man a Bernie Sanders medal, he is a Democratic Socialist and doesn’t even know it. Socialism claims the right of the “people” (aka the State) to own the means of production. Ownership conveys a right to control, you don’t own it, you can’t control it and vice versa. Well if the state can tell prospective investors in a new hospital what they can’t do with their own money, then what is the state doing other than asserting an ownership (control) claim over those investors’ property? I’m sorry Republicans; I must have missed the part in the Constitution (Federal or State) where it says we have a right to a livelihood unfettered by nettlesome competition. Repeat after me, just because a violation of rights can be harmful doesn’t mean anything deemed harmful is a rights violation.