Mazur: Certificate of need is obsolete

By Frank Mazur

There is a push for consumerism to address our high health care costs. Given the freedom to choose health options, consumers will be more cost-conscious when seeing a doctor or going to a hospital. It’s part of President Donald Trump’s health care reform efforts.

Most states are stifling consumerism though their certificate-of- need (CON) laws. Vermont, which is the country’s leader in CON laws, has imposed 30 laws on health providers. Florida, which is allegedly a consumer orientated state, has 17 laws, including hospital and nursing home bed allocations.

There are several respective CON studies that conclude CON laws are protectionist, anti-competitive, and stifle innovation. The laws rely on central planning and are a hidden tax on health care consumers.

When a state representative was a few years ago asked why the CON can’t be eliminated his response was, “There are powerful lobbies in the State House that are protecting health industry interests.” This focus restricts entry, expansion and competition.

Lawrence Brown, in the journal “Health, Politics, Law” says there is no evidence the CON reduces costs. The late Senator Ted Kennedy said the CON process fosters anti-competitive behavior. The CON process is antiquated and the Federal Trade Commission has asked states to abandon it.

CON resource allocations by government bureaucrats can’t replace private decisions by health care entrepreneurs, nor can they lead to better outcomes and less costly delivery of services to consumers. The impersonal hand of government can never replace individuals’ freedom of choice.

Frank Mazur is a former state representative from South Burlington, a former member of the EAI board of directors, and a former member of the Public Oversight Commission, which was responsible for overseeing the Certificate of Needs process in Vermont. Reprinted with permission from the Ethan Allen Institute Blog.

2 thoughts on “Mazur: Certificate of need is obsolete

  1. When a state representative admits that the repeal of the Certificate of Need statue is being held up because powerful lobiest representing the health care industry oppose it, we have a serous problem in Montpelier. If our representatives do not have the guts to do what is right for fear of offending lobiests, we have inmates running the institution. Will it ever end?

  2. Having once worked in a federal agency dedicated to CON and DON, I don’t require much convincing that natural business competition is the sensible path forward. The office I worked in had a staff of six people to process the bureaucratic paperwork and manage and account for our low-level office. I’d like Frank Mazur to write again on how we the people can begin to dislodge this expensive bureaucracy.

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