TONY WEST: While neighboring states invite health care innovation, Georgia continues to stifle it

Expecting mothers near Augusta may be surprised to learn there are currently no birthing centers within 130 miles. Katie Chubb certainly was when she was forced to drive 2.5 hours to find one during labor. Katie tried to change that by opening a birthing center in Augusta. However, she was prevented from doing so when the state refused to issue her a “certificate of need.” Mrs. Chubb is currently fighting for her right to open the birthing center in court.

Certificate of need laws empower bureaucrats, rather than patients’ needs, to determine what health care services are offered. In the past few years, four of Georgia’s neighbors have significantly reformed or repealed these antiquated laws restricting new investment in health care facilities and services.

Tennessee, North Carolina and Florida passed bills exempting numerous services from their CON laws’ onerous regulatory requirements. Earlier this year, South Carolina repealed CON requirements for all facilities and services except for nursing homes. At least a dozen more states also have repealed their CON laws.

Georgia’s failure to repeal or reform its CON law is devastating for investment in health care options for Georgians. Since 2010, Georgia’s CON program has denied or delayed $1 billion in new health care investment — and potentially deterred just as much.

CON laws require health care providers to obtain approval from the Department of Community Health before acquiring, replacing, or adding facilities, services, or equipment. According to DCH, the CON program is intended to “define and measure need, control costs, and guarantee access to health care.”

Fifty years ago, lawmakers believed they could control rising health care costs by preventing providers from offering redundant services in the same proximate area. In 1974, Congress mandated the states establish CON laws to receive federal health care funds. Georgia, along with nearly every other state, complied.

Congress later lifted the mandate after CON laws proved ineffective at controlling cost or ensuring access. Indeed, a growing body of research shows CON programs fail to achieve these goals and may counteract them. Several recent studies find that compared to states without CON laws, states with CON are associated with higher patient spending, fewer medical facilities, and inferior patient outcomes. The Mercatus Center estimates Georgia would have 74 additional hospitals without CON, 27 of which would serve rural areas.

Americans for Prosperity recently published a report analyzing CON applications submitted to DCH since 2010. The report reveals that in the last 12 years, DCH denied approximately $700 million in proposed health care investment.

However, the true cost of CON in Georgia is even greater. Georgia’s CON program pits providers against each other to fight for government favor. Rather than appeal to patients, providers must petition the government’s central planners for permission to care.

Competing providers oppose others’ CON applications and even litigate CON decisions in court. The Georgia Public Policy Foundation recently released a study that found competitor opposition to a CON application increased the time to decision by 520 days and increased the chances an application is denied from 20% to 50%.

At the start of this year, Americans for Prosperity found rival providers were appealing a dozen CON approvals, preventing the deployment of approximately $269 million in already-approved health care investment. These appeals can take years to resolve and cost hundreds of thousands of dollars, delaying development of vital services and diverting resources from patient care.

Just last month, the Georgia Supreme Court agreed to hear a dispute between three metro Atlanta care providers. The case made its way up through the state courts after DCH granted one hospital a certificate of need to develop a radiation therapy center to treat cancer patients in 2020. Two competing providers appealed the decision. More than three years later, the CON remains mired in litigation while patients go without critical care that would otherwise be available to them.

Repealing CON laws is essential to giving people what is known as a personal option in health care. These laws stifle access to quality care and keep prices high. Removing them means more choice, more control, and lower costs for patients and families. No wonder 75% of Americans want to see them done away with.

The Institute for Justice counted 50 specific CON requirements in Georgia, making it one of the nation’s most restrictive CON programs. While Georgia’s neighbors roll back their outdated CON regimes and invite innovation in their health care industries, Georgia’s CON program persists to protect politically proficient providers from competition by artificially limiting the supply of health care at the patients’ expense. So much lost health care means higher prices and less access for patients in the Peach State.