What Does Data Tell Us about Certificate of Need in Health Services?
Dec 18, 2023
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The podcast explores the negative effects of certificate of need laws in healthcare services, including limited availability and increased costs. It discusses the limitations of evaluating medical facility needs and the impact of these laws on healthcare services during the COVID-19 pandemic. The podcast also analyzes the changes in certificate of need laws in South Carolina and Florida, debunking misconceptions. Additionally, it highlights how these laws suppress wages, limit opportunities for healthcare workers, and hinder entrepreneurial endeavors and new services by physicians.
Certificate-of-need laws make health care services relatively less available or more costly.
Certificate of Need laws hinder opportunities for physicians who wish to offer new services or practice in a different way.
Deep dives
The Impact of Certificate of Need Laws on Healthcare Access
Certificate of Need laws restrict the ability of healthcare providers to expand or establish new facilities, hindering convenient and considerate medical care. These laws require explicit permission from competitors who may lose business, rather than responding to the actual needs of patients. The formula used to determine need often overlooks those who are not currently receiving services due to limited availability. Preferences and specialties are also not considered. However, some states are now realizing the drawbacks of these laws, particularly after facing shortages during the COVID-19 pandemic. Changes are being made to free up private health service providers and increase accessibility to care.
The Downside of Certificate of Need Laws
Certificate of Need laws were initially encouraged by the federal government to help control healthcare costs, but it was later recognized that they did not achieve the intended outcome. Hospitals and incumbent service providers tend to support these laws, which restrict doctors from establishing facilities and providing care. Many doctors express a desire to offer new modalities of care but are afraid to speak out due to potential repercussions from hospitals or employer organizations. However, states like South Carolina and Florida have recently repealed or modified these laws, leading to increased growth in ambulatory surgical centers without affecting hospital closures.
Influence on Healthcare Workers and Opportunities
Certificate of Need laws also impact healthcare workers, with emerging data suggesting that wages are suppressed for healthcare professionals in states with these laws. Moreover, these laws hinder opportunities for physicians who wish to offer new services or practice in a different way, leading some to locate in states without such restrictions. As the healthcare industry faces challenges in maintaining physician and healthcare provider numbers, certificate of need laws further limit opportunities. States like Georgia, Iowa, and Kentucky are currently reviewing these laws, with potential bills and legislation for their repeal or modification.
No matter how you slice the data, it tells a clear story: Certificate-of-need laws make health care services relatively less available or more costly. Jaimie Cavanaugh of the Institute for Justice explains.