Why is it time to reform CON laws?


December 23, 2020 12:19PM

With the recent uptick in COVID-19 cases, fears of overwhelming our healthcare system’s capacity have understandably resurfaced. In fact, current hospitalization rates are higher now than in the spring during the first surge of the virus.  Preserving the healthcare system’s capacity, namely hospital beds, was one of the original justifications for government lockdowns in order to “flatten the curve.” 

However, this debate about whether we are adequately ensuring we have the ability to manage the growing cases and hospitalizations misses an important point: some of these worries about capacity are our own doing. Think about hospital beds as a market, with a “supply” and “demand.” Lockdowns and other restrictions are essentially designed to reduce “demand” for the hospital beds. Meanwhile, another option to policymakers is to simply increase supply in order to ensure people who need these services can get them. But how can policymakers increase the supply of hospital beds? Simple: repeal certificate of need (CON) laws. 

As a recap, CON laws require providers to prove there is an unmet need in a community before they can expand or add new healthcare services in a specific geographic area. Imagine if Chick-fil-a had to prove to a government bureaucracy that a certain area had a shortage of chicken sandwich providers in order to open a restaurant in a new town, all while McDonald’s and Popeyes object to the agency saying they can more than adequately meet demand. 

Here at Beacon, we have repeatedly called for repealing and reforming our state’s remaining CON laws. Currently, twenty different services and providers require a CON in Tennessee including hospital beds. These CONs increase costs to consumers and restrict access. This is so well known that in order to better fight the pandemic, Gov. Bill Lee temporarily suspended the need for a CON for hospital beds by executive order. If we have to suspend regulations in healthcare in order to fight a pandemic, what is the justification for them in the first place? Tennessee lawmakers should repeal all CONs, or at the least, reform the process for those that are not repealed. Just think, had the government not been involved in rationing and approving hospital beds for the past few decades, chances are we wouldn’t be worried about healthcare capacity in the first place.