As a native of the rural Appalachian portion of East Tennessee, I have witnessed the impact of Certificate of Need (CON) laws firsthand on small, disadvantaged rural communities. These contemptible regulations, purportedly designed to control healthcare costs and maintain quality, have succeeded only in further worsening existing healthcare challenges and hindering access to critical medical services for rural residents - particularly those who are in sparsely populated areas.
One of the most significant consequences of CON laws in rural communities is restricted access to medical care. Studies have shown that such regulations create barriers for new providers, making it harder for them to enter the market and serve undeveloped regions, perpetuating a quasi-monopoly of a few existing providers.
Research from the Mercatus Center at George Mason University reveals that CON laws are associated with higher mortality rates for treatable conditions in rural areas. Because they impede the growth of medical facilities and the adoption of innovative technologies, these regulations deprive smaller rural communities and their residents of access to specialized care and timely treatment options. Put simply, this costs lives.
CON laws also lead to higher healthcare costs, further burdening residents of rural communities faced with medical woes. The same study from the Mercatus Center found that states with CON programs have higher healthcare spending compared to states without such restrictions. The lack of competition that results from CON laws allows existing providers to maintain high prices without facing the normal pressures of competition that often lead to more affordability and efficiency in a given industry. According to the Kaiser Family Foundation, States with CON laws have 11 percent higher healthcare costs than states without CON laws. That’s a significant statistic.
The plight of rural hospitals under these regulations is especially troubling. CON laws have played a significant role in the closure of numerous rural healthcare facilities, leaving communities grappling with restricted access to critical emergency care and essential medical services. A study published in Health Affairs provides evidence that CON regulations are directly linked to a greater likelihood of rural hospital closures, further intensifying the existing healthcare disparities in already underserved areas.
In states like my own, where rural communities grapple with limited access to vital healthcare services, the impact of CON laws is particularly harmful. As advocates of a free market, Austrians should be particularly vocal in our advocacy for the complete abolition of such laws. Doing so would liberate healthcare providers to expand and innovate, breeding healthy competition that can lead to lowered costs and improved quality of care for residents across the board, irrespective of their geographic location.
As with almost every other problem, the solution to the high cost of healthcare is to get heavy-handed government out of the way and let the market work. To this end, CON laws must be the first of many harmful regulations that artificially drive up the cost of healthcare and shaft working-class Americans to face the chopping block.
