This blog post was authored by IWF Junior Fellow Aubrey Wursten.

Faith in U.S. health care has declined drastically over the past four decades. Only six in ten Americans trust the people in charge of the healthcare system, placing U.S. confidence level at 20th of the 27 developed nations polled in one Statista report. And many Americans feel the COVID-19 pandemic further exacerbated the lack of trust in health care as a whole.

The primary reason patients gave for their suspicion was their perception that professionals in the healthcare system acted out of self-interest rather than concern for patients themselves. Patients also cited a lack of transparency as a concern. People’s distrust of government in general has also increased, affecting feelings toward a healthcare system that is controlled by legal regulations.

Certificate of need (CON) laws amplify all three problems. These laws allow powerful healthcare organizations to limit their competition, thereby limiting the choices of patients. They also allow backdoor agreements to corrupt the process by choosing which providers get certificates, with little or no transparency about what led to the boards’ decisions. This government intervention just adds concern about another level of corruption in an arena already full of proven impropriety.  

Financial Incentives

CON laws benefit existing providers. Once they receive a certificate, they can effectively “draw the ladder up after them,” preventing any new practitioners from competing with them. By their own admission, and obvious by rules of logic, this is in their best interest. 

A monopoly has no motivation to invest in better care methods, providers, or equipment in order to keep patients. A monopoly can charge higher prices than a practice surrounded by competition. It does not need to improve customer service or comfort in order to maintain and even grow its business. Patients have no other options. No wonder they have lost faith in the people who are supposed to be earning their loyalty. 

Lack Of Transparency

Patients in a medical setting are in an inherently vulnerable position. They often do not understand what is happening within their own bodies, much less in the system trusted to heal them. They frequently cannot even get accurate pricing information when choosing a doctor or a procedure, and they certainly do not know what behind-the-scenes deals led to that final number. 

Health care, with its astronomical costs and life-altering possibilities, needs more, not less, transparency than mundane daily expenditures. Even someone eating at a restaurant would like to know the establishment had to prove itself to qualify for customers. A medical patient surely needs to know if her doctors are running a thriving business because they have offered outstanding care, or if they just used CON to prevent anyone better from practicing. No patient can be comfortable knowing the latter might well be the case. 

A Breeding Ground For (And History Of) Corruption

CON laws provide a perfect climate for political fraud. Like the mafia, the government decides who opens and who closes, who wins and who loses. Even under the most honest administrators of such a program, bias will creep in. Under anyone less upright, friends and family will open and win, and political enemies will close and lose.

This is not merely theoretical or speculative, either. Politicians have bestowed CONs on friends as political favors, and this deceit has occurred at high levels of government. At least two state governors, Edwin Edwards and Rod Blagojevich, have been indicted specifically for conflict of interest in granting CONs, and those are just the ones who got caught. Patients will never have faith in a healthcare system run like an organized crime network. 

Moving Forward

As CON laws get more attention, people need to take action. The recent pandemic highlighted the issue and now is the time for legislators and voters alike to demand change. Vote against the CON.