Certificate of Need (CON) laws have flouted ethical principles and economic theory since the first CON program began sixty years ago. Often called the competitor’s veto, this legislation allows incumbent medical professionals to prevent new practices from opening, based solely on claims the local healthcare market does not “need” more medical services. 

Predictably, the 35 states maintaining these laws have fewer providers and facilities, and the existing ones charge higher prices. Their patients suffer longer travel and wait times and report lower satisfaction rates. But if principles and statistics fail to convince anyone of the absurdity of these laws, examples of real-world outcomes should help. 

Return Trip Not Included

Any state would love to be known for its hospitality. But Kentucky’s CON laws took it a step too far by making it difficult for patients to leave

Legacy Medical Transport, operating from Ohio, faced no opposition when they gave non-emergency patients a lift into Kentucky. However, Kentucky prevented Legacy from transporting patients back to Ohio. Legacy could take customers to pick up prescriptions from Kentucky… but they technically had to leave them there. (Notably, hitchhiking is legal in Kentucky, so a passing truck would have better luck getting the patient back home without retribution.) 

Musical Surgical Chairs 

Dr. Jay Singleton, an ophthalmologist, performed 2,000 eye surgeries every year. Many of these surgeries, such as cataract removal, lasted mere minutes. His surgical fee was $500, and he estimated facility fees at $700, for what should have been a total of $1,200. He wanted to complete these basic procedures in a surgical suite at his office, as many colleagues did. 

Unfortunately, Dr. Singleton attempted this feat in North Carolina, which is notorious for denying CON requests. It also requires a doctor to obtain a CON before charging facility fees. After being denied a CON, Dr. Singleton could not recoup the $700 facility fee. His $500 surgical fee would therefore result in a loss of $200 per surgery, so he now has to do the procedures at the hospital, which charges $6,000—per eye—in facility fees.

And this story gets odder. Singleton is allowed to do the preliminary work at his office, but he has to pause in the middle of surgery to help patients out of the chair and into a ride to the hospital, where they receive a few minutes of further treatment (and a $12,000 bill). 

Too Much Health Care

Connecticut requires medical providers to obtain a CON before purchasing a positron emission tomography (PET) machine. It also requires them to obtain a CON to stop providing services. One might think abruptly stopping services would be of more concern than offering too many, but Connecticut disagrees. 

Connecticut’s Office of Health Strategy (OHS) rarely issued fines for failing to comply with CON regulations, because, until last year, it had to prove the provider “wilfully” ignored the law. As even a mighty bureaucracy can’t read minds, it admitted it did not know if the failure to navigate the CON paperwork minefield was willful or unintentional. The process, after all, can take more than a year. 

But the OHS did threaten four providers with action between 2018 and 2023. Three of those had halted services without a CON, but the OHS forgave them. The fourth, however, had the audacity to purchase a PET machine without obtaining a CON. And the OHS levied a $20,000 fine for this medical provider purchasing medical equipment.

More MRI Madness

In 2017, North Carolina doctor Gajendra Singh wanted a magnetic resonance imaging (MRI) machine. As a patient himself, he knew MRI prices at a hospital were astronomical (sometimes $24,000), and he believed he could offer them for $500. But, true to form, North Carolina competitors and the CON board did not think he “needed” one. 

Dr. Singh resorted to renting an MRI machine, which inexplicably did not require a certificate. Because renting was more expensive over time than buying the equipment outright, this was detrimental to both his business and his patients, but he soldiered on… for a time. 

Sadly, in 2020, hampered by the increased cost, Dr. Singh closed his imaging center.

Like the other providers listed here, Dr. Singh fell victim to the bizarre—yet somehow legal—competitor’s veto. And although the damage to the practitioners is undeniable, the consequences to patients can be downright deadly. No industrialized nation has any excuse to subject its citizens to such avoidable dangers. CON laws are absurd by their very nature, and these examples illustrate just how capricious legislators have become in enforcing them as well.