CON Value Called into Question

Posted on July 13, 2012


Becker’s Hospital Review reports that funding for South Carolina’s Certificate of Need (CON) program for 2013 was vetoed by the Governor.  Governor Haley feels it is not the role of the state to determine communities’ needs for healthcare or equipment.  Make that one emphatic vote of ‘no confidence’ for the CON, and one emphatic vote for the free market.

In these times of belt-tightening, states need to assess which programs are worth their budgets.  If a program does not deliver value, it should be cut.  I applaud the Governor for her courage.

The article also notes a possible connection to a recently disputed CON over a proposed outpatient center by Hilton Head Hospital.  The original ruling denying a duplicate facility was overturned, and the project is now proceeding.

Unfortunately, this is not an isolated incident.  Next door in North Carolina, two hospitals were fighting over rights to develop a new hospital halfway between the two competing healthcare systems.  Instead of making a courageous ruling in favor of one or the other, the state was spineless and denied both.  All things being equal, it is not uncommon for CON rulings to default to equality so everyone is equally frustrated and confused.  It would have been just as unfortunate if both systems were approved, as both systems already had approved, albeit smaller CONs in place for the same two-mile stretch of highway.  They both abandoned their big plans and are moving along with more modest ones.  It wasn’t too long ago the CON was under fire in North Carolina.

One of the best things that could happen to healthcare is competition between hospitals based on transparent quality…not artificial competition manipulated by government CONs.  Patients would go to whatever hospital they felt most comfortable going to.  If the local hospital was close, but performed poorly, patients would need to decide on value themself, much like you or I decides where we shop.  If I want to buy something and the local store has poor customer service or selection, I must decide if it is worth driving further, or shopping online.

Let’s face it:  the CON process simply does not do its job anymore.  CONs are a holdover from an earlier time, and times have changed.  In a world where decisions are driven by data, CONs are without hard data to back them up.  CONs…do not control overbuilding or excess capacity…do not positively affect healthcare costs for the consumer…do not properly regulate competition…do not ensure an applicant’s ability to finance, staff and operate the project, or manage capital project costs any better than the free market.  If they did, healthcare in the 35 states with CONs would be cheaper than those without regulatory control. 

CONs are slow, expensive and rely on suspect or easily manipulated information. 

Let states defend their Certificate of Need programs with data proving their benefit—or spend the CON budgets elsewhere.