Certificate of Need: A Barrier to Access

Freestanding emergency centers’ (FECs) medical services meet the same requirements and accreditations as hospital ERs. They are conveniently located, offer little to no waits, and provide an unsurpassed quality of emergency care to patients. FECs’ reduced size and lower overhead and operational costs when compared to traditional hospitals allows them to provide their services in areas where hospitals cannot exist.

These are some of the many reasons why FECs are proliferating.

However, state-level certificate-of-need (CON) laws restrict the creation or expansion of FECs in 36 states. CON law mandates that those looking to open or expand a healthcare facility must obtain government approval by demonstrating that the community needs the proposed facility.

CON laws were originally devised in the 1880s to regulate railroads and other public utilities. Legislators believed these regulations would prevent ruinous competition and ensure the availability of services to everyone. In 1974, the federal government adopted hospital-related CON laws to prevent increased healthcare costs and the over-expansion of hospitals.

Unfortunately, wealthy and politically connected healthcare providers used their capital and influence to gain government certifications. Once certified, these providers proceeded to use their political clout to block competing providers from receiving certification.

By 1987, the federal government repealed the national CON law because it restricted competition and limited the amount of available health services, rather than restrain healthcare costs. In fact, multiple studies have shown that a lack of competition in healthcare actually drives up the costs to patients.

In 2015, the Federal Trade Commission stated, “CON laws raise considerable competitive concerns and generally do not appear to achieve their alleged benefits for health care consumers.”

Simply put, CON laws are used to impose an artificial order on the market, without regard to what consumers themselves want or need. Facilities and services should be available on the basis of patient need and a provider’s ability and willingness to meet that need, which is why more and more states are repealing their outdated CON statutes.

FECs have proven they are willing and able to meet the needs of their patients. FEC proliferation proves patients want FEC services. It’s time states allow for more competition and increase the availability of healthcare facilities, procedures, and providers by eliminating CON laws.