Protect our right to find healthcare

 A fascinating discussion about the size and scope of government broke out last week at a legislative committee hearing. Only, that’s not how it was framed.

The House Special Committee on Access to Quality Healthcare was considering a bill to make it easier to build new hospitals in rural counties. The motivation: Some residents of Butts County want to build a larger hospital due to rapid projected population growth along the I-75 south metro Atlanta corridor.

Bill proponents lamented it could take two to three years to complete a state bureaucratic review of their project under the current process – and only then begin construction. Opponents complained the new hospital could take business and employees from nearby facilities.

There’s some truth to both arguments. But the real question is why the government even involves itself in such decisions.

The approval process at issue is called “certificate of need,” or CON. It’s a relic from a time when hospital construction and capital improvements were financed far differently than today, and taxpayers had an interest in ensuring they didn’t pay for an overabundance of facilities. But that financing regime changed decades ago, and the federal government – which instituted CON in the first place – has gone so far as to recommend its repeal. About a dozen states have done so.

The rarity of the feds encouraging deregulation of any kind should be reason enough to get people’s attention. But common sense should do it as well.

Try to think of another industry besides casinos in which the government reserves the right to block incumbent suppliers from offering new services, and to block new entrants from setting up shop at all. Acknowledging the importance of healthcare, we can even limit our thought exercise to such essentials as housing, education and food.

Home builders need building permits, but the government doesn’t issue them based on a contrived calculation of how many more homes are “needed.” Even in K-12 public education, which has plenty of monopolistic tendencies, the government doesn’t dictate whether private schools can open or expand.

Let’s flesh out the concept a bit. Imagine the government decided whether your community could have a grocery store, how many and which foods it should be allowed to stock, and whether any other groceries should be allowed to open within driving distance of you. Imagine all the obvious implications that would have for prices (undoubtedly higher), selection (certainly lesser), and quality (surely lower).

Now imagine an entrepreneurial grocer had to spend years and large sums of money to apply to open a new store, or to expand one he already operated. Imagine he also had to weigh the time and cost of fending off other grocers trying to block it from opening, because they had a legal right to appeal his application. And imagine he had to go through this process whether he wanted to open a full supermarket, or just a butcher shop or a bakery.

Get that picture in your head, and you have an idea of how wrong-headed CON is.

Hospitals cry poverty an awful lot, for an industry that most Americans believe to be overpriced. They’re not the only industry with large capital costs or highly educated workers. The numbers show healthcare prices are even higher in CON states than in those without CON laws.

According to a 2020 study by the RAND Corporation, inpatient procedures in Georgia cost about $4,000 more than the average in non-CON states, a difference of almost 18 percent. The numbers also show Georgia hospitals charge privately insured patients almost 2.9 times Medicare rates for the same procedures, compared to less than 2.5 on average in non-CON states, a difference of about 17 percent.

Healthcare is a complex industry, and no single reform can correct the myriad distortions that come from too much government intervention. No longer letting bureaucrats and would-be competitors veto new services in Georgia may not be sufficient to the task, but it is necessary.

Kyle Wingfield is president and CEO of the Georgia Public Policy Foundation, found online at www.georgiapolicy.org.

https://www.thenortheastgeorgian.com/opinion-editorial/protect-our-right-find-healthcare