By Christina Herrin
This article was originally published by The Heartland Institute on February 26, 2021.
Alaska is one of 35 states that enforce certificate of need (CON) laws. These laws are the epitome of government red tape. Moreover, they have hindered health care quality and access by stifling competition since their inception decades ago.
These burdensome laws were intended to control health care costs and duplication of services by requiring expansion of health care facilities to undergo evaluation by a state health care board. In other words, CON laws are central planning specific to the health care industry.
Those who study history know that central planning almost always ends in disaster. Just Google “Soviet Union” or “North Korea.”
Therefore, it should be no surprise that CON laws have been an abject failure. According to the Kaiser Family Foundation, health care costs are 11 percent higher in states operating with CON laws than those without.
Like too many states, Alaska is suffering under these burdensome regulations. In fact, Alaska has some of the highest health care costs in the nation. Alaska’s spending on hospitals and on physician and clinical services are 50 to 80 percent higher than the national average.
One of the many problems with CON laws is that they are the embodiment of cronyism. They protect established industry leaders from competition by limiting entry into the health care marketplace. Unlike a free-market system, CON laws harm consumers (aka patients), leading to fewer health care options at higher prices. Moreover, CON stifles innovation, leaving patients with less access to emerging technologies in the medical marketplace.
Fortunately, some Alaska legislators are leading the fight against CON cronyism with the introduction of legislation to repeal certificate of need laws in the state.
Alaska, like many states, temporarily suspended CON laws during the height of the COVID-19 pandemic. The suspension of CON laws over the past year begs the question: if we don’t need CON during one of the worst health care crises in our country’s history, why should CON be on the books at all?
Members of the Alaska Legislature are bringing these discussions to the forefront. If there was a time to show evidence of the failures of CON, COVID-19 demonstrated this to the fullest.
It is obvious that government bureaucrats can’t determine supply and demand as hard as they might try. Providers and patients are the only ones who have a clue if there is a need for services or facilities, or not. During the COVID-19 pandemic, 24 states temporarily suspended these draconian laws so the medical industry could respond to the needs of patients.
CON laws are outmoded and cause unquantifiable issues within the Alaska health care system. Successful repeal is on the table for the 2021 legislative session. And it is up to the elected officials to remember who they represent: patients, not health care monopolies. Repeal of CON is in the best interest of patients across Alaska and the country as a whole.