Report: Alabama lawmakers should scrap state’s certificate of need program

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Svitlana Hulko

A report by an Alabama think tank urges lawmakers to scrap the state’s certificate of need program.

The report by the Alabama Policy Institute says the program, which requires any health care provider to request permission from state officials to build a new facility, add a new piece of equipment or treatment beds, is one of the most stringent in the nation.

Alabama’s Certificate of Need Review Board manages CONs for 17 different types of care, something the policy institute says is costing taxpayers money and limiting health care options.

The policy institute report also says that certificate of need laws benefit established providers and limit both competition and innovation.

“There is no evidence that free-market competition cannot work to control rising health care costs,” the report read. “CON laws have had the opposite effect of this intent. In areas where providers have been allowed to flourish, customers have been rewarded with an increase in healthcare options and more competitive pricing.

“It is time for the Alabama Legislature to repeal CON regulations and unleash the power of the free market.”

The report cites research by the free market Mercatus Institute, which showed that per-patient spending in the Yellowhammer State could be reduced by $203 if the certificate of need laws were repealed.

The Mercatus Institute also predicted that scrapping Alabama’s certificate of need regime would increase the number of hospitals by 53 (18 of those in rural areas) and add six more ambulatory surgical centers.

Alabama is one of 35 states with a certificate of need laws. Florida is the most recent to scrap either partially or all of its regulations.

North Carolina is looking to ease some of its certificate of need regulations in exchange for an expansion of Medicaid for 600,000 able-bodied adults.

Republished with the permission of The Center Square.