CON Laws: When The Government Decides Communities Don’t “Need” Health Care

Although statistics and economic principles show they result in the opposite effect, certificate of need (CON) laws are ostensibly designed to ensure communities get just the “right” amount of healthcare choice. Unlike safety regulations, which control quality and risk, CON regulations control the number of healthcare providers, patient beds, and pieces of medical machinery allowed in a community. And because many well-connected current providers predictably insist their potential new competitors are not “needed,” CON boards regularly override the stated wishes of community members and deny new practices the legal right to open.

So, what are some healthcare services your government has decided you don’t need?

A Second Hospital In Maui

Hawaii’s geography leads to difficult healthcare logistics. If a medical service is not available on one island, a patient requires boat or air travel to reach it. This hardly meets the definition of accessible healthcare, and the Hawaiian government states it has a specific mission to ensure patients can find care “as close to their homes as possible.” So when Malulani Health and Medical Center applied for a certificate of need on Maui, which only had one aging hospital with limited services, the need seemed obvious. The existing facility, the state-run Maui Memorial Hospital, did not even have the ability to manage cardiac cases, and it was transferring more than 350 cardiac patients every year—almost one per day—by air. 

However, the CON board worried competition from a new hospital would negatively affect the old, which was indeed likely. Most patients would probably patronize a nicer hospital with more services. Prospective patients could argue it was not their job to prop up an ailing hospital by sacrificing their own health and comfort. 

However, the Department of Health decided the locals did not really need a better hospital. They refused to issue a certificate. 

Addiction Recovery In Connecticut

Connecticut’s dire lack of addiction center beds prompted them to set up a hotline where addicts could check where and if room was available for them. This hardly paints the picture that “at any given time across the state of Connecticut … we haven’t had the significant issue of finding beds.” However, this was the claim of High Watch Recovery Center CEO Jerry Schwab, when he protested the CON application of Landmark Recovery, which wanted to open a competing facility. 

Like many states, Connecticut sees addicts suffering—or even dying—as they wait. Often, people in crisis end up costing themselves and taxpayers exorbitant amounts in emergency rooms or jail. 

Regardless, the Connecticut Office of Health Strategy sided with Schwab. They agreed that people suffering from addiction did not need another available facility, and they rejected the CON application.

Medical Transport Service In Kentucky

Kentucky patients needing non-emergency transport have at least one fewer option than they would without CON legislation. Legacy Medical Transport, located just across the Ohio-Kentucky border, failed to convince the state it was needed. Legacy received regular calls for service from Kentucky, and Kentucky already had longer ambulance response times than average, but four incumbent ambulance companies insisted they could manage all the transport needs of Kentucky patients.

When Legacy sought legal help after they realized they were likely missing out on 300 Kentucky transport jobs every year, they sued the Kentucky Cabinet for Health and Family Services. Eventually, the Sixth Circuit Court ruled that the Interstate Commerce Clause forbade Kentucky from preventing Legacy from transporting patients to Ohio. However, Legacy still cannot transport anyone from one Kentucky location to another.

Kentucky patients showed, by using Legacy, that they wanted the option to do so. But once again, the existing companies won, and the patients lost. Kentucky decided patients didn’t need the option, and the state denied another CON application. 

And More…

With CON laws in 35 states, the examples are innumerable. Prospective patients attend CON hearings, sign interest forms, and actually use the services to indicate they need them. Prospective new medical providers obtain licensure, assess community interest, and prove they are a safe option for members who need them. 

But again and again, existing businesses and their lawyers testify that patients don’t know what they need. And CON boards keep agreeing with them.