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Maryland Doesn’t Need Certificate of Need

by Marc Kilmer

JANUARY 8, 2013 Bookmark and Share

If I told you there’s a way the government can lower overall health care spending and improve patient mortality without costing taxpayers a dime, would you believe me? What if I said that, in fact, all this could be accomplished and it would actually save the state some money? At the risk of sounding like an infomercial pitchman, let me assure that that even though it sounds too good to be true, I can assure you it is.

Scrapping Maryland’s Certificate of Need (CON) law will save consumers money, will likely improve their health care, and will lead to lower state spending. It’s something that legislators should look into during this session of the General Assembly.

As I’ve written about in the past, the CON law mandates that any health care provider looking to open or expand must get permission from the state. The economic rationale is pure central planning: government, not the market, knows best what providers and consumers need. Somehow government planning will control costs and lead to better care.

The evidence is overwhelming that this isn’t the case. There have been many studies done that refute the idea that CON laws reduce health care spending. Now there is a comprehensive new study that finds states that repealed their CON laws actually reduced the cost of medical procedures to patients and improved patient mortality.

We hear a lot from politicians across the political spectrum that government needs to find a way to improve patient care, bend the health care cost curve down, and reduce the amount of money government spends on health care. Eliminating Maryland’s CON law would accomplish all these goals.

This shouldn’t be a liberal vs. conservative issue, either. Yes, repealing CON can be seen as deregulation. The state government would have a little less control over what health care providers do in the state. But the result of CON laws is to protect established health care providers from competition from new entrants into the market. As the evidence shows, costs are higher in CON states than in non-CON states, and this extra money flows to hospitals and hospitals that are protected by the CON law from competition. The state’s CON law is a way to protect rich doctors and big health care businesses from competition and allow them to extract excess money from consumers. Why would any liberal want to support it?

Legislators have a lot on their agenda for the next three months. There will likely be partisan bickering over the gas tax, state spending, land use rules, and many other things. Eliminating the state’s CON law should be something that legislators in both parties could support. Helping improve health care quality and lowering health care costs shouldn’t be controversial.


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