An assemblage of South Carolina lawmakers and lobbyists gathered in the rotunda of the S.C. State House this week to watch governor Henry McMaster ceremonially sign a long-overdue phaseout of the state’s “Certificate of Need” (CON) legislation.
CON laws were passed in numerous state legislatures by large healthcare providers – ostensibly because hospitals could not make a profit in unregulated markets due to excessive competition. In reality, CON laws – which require the construction of new medical facilities to first be approved by bureaucrats – allowed for the complete stifling of competition by firms already dominating the market.
Originating in New York in the 1970’s and becoming federal law shortly thereafter, the measures were by all accounts a collective failure. Less competition predictably led to the chronic under-service of patients in areas where it was less profitable to operate, as hospitals were content to prevent the construction of competing medical centers which might detrimentally impact the bottom line of their flagship facilities.
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Federal legislators recognized the experiment’s failure, and removed CON from the U.S. Code in 1986. Unfortunately, this didn’t stop state legislators from holding on to the power CON afforded them for many more decades. Thirty-five states still had CON laws on the books at the beginning of this year, South Carolina included.
If you follow FITSNews’ coverage of the Palmetto State’s corrupt, results-challenged government, it shouldn’t surprise you this arrangement – which put elected officials and bureaucrats at the center of a multi-million dollar industry – was something that lawmakers were reluctant to abdicate.
State senator Wes Climer of Rock Hill, S.C. led the multi-year battle to wrest this power away from state actors. South Carolina’s program, administered by the S.C. Department of Health and Environmental Control (SCDHEC), forced hospitals to seek DHEC approval if they sought to build new facilities, open new practices or purchase certain types of new equipment. This arrangement allowed for the state’s entrenched healthcare providers to muscle out newcomers looking to open practices, and to prevent competitors from installing vital instruments like MRI machines.
Climer described the repeal as a win for patients at today’s ceremony.
“They will have more choices, they will have lower costs … not by spending more money, not by creating new programs, but by getting government out of the way to unleash the private sector to invest and compete,” he said.
As South Carolina’s population continues to grow, our medical infrastructure must also scale up. Removing the ability of entrenched industry powers – and blundering bureaucrats – to stifle competition was a necessary step in facilitating this much needed growth.
ABOUT THE AUTHOR …
(Via: Coleman Rojhan)
Dylan Nolan is the director of special projects at FITSNews. He graduated from the Darla Moore school of business in 2021 with an accounting degree. Dylan primarily covers education when he isn’t producing video content. Got a tip or story idea for Dylan? Email him here. You can also engage him socially @DNolan2000.
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