HB 1214: Repeal Certificate of Need laws

By Mississippi Center for Public Policy
February 19, 2020

House Bill 1214, sponsored by Rep. Lee Yancey, would repeal Certificate of Need laws in Mississippi. CON laws work to stifle competition, limit choice, and raise the cost of healthcare for consumers.

CON laws require would-be medical providers to prove — essentially to their competitors — that their community needs a new facility or service. The equivalent in the computer business would be a law prohibiting a startup (i.e., Apple) from entering the market without permission from IBM. Such a law would have prevented Apple from ever getting off the ground, making the iPhone revolution very unlikely. Just as competition in the computer industry has helped billions of consumers worldwide, repealing CON laws will increase the quality of healthcare for millions of Mississippians. 

CON laws are a relic of a short-lived federal mandate that was repealed in 1986. After an initial push in the states to roll back these laws, lawmakers have been reluctant to challenge hospital monopolies. Rising healthcare prices, as well as rapid advances in technology, are encouraging state lawmakers to realize that CONs are harmful. In 2019, Florida repealed its CON law for hospitals and tertiary services. Likewise, Georgia recently reformed its CON laws. 

Fifteen states currently have no CON laws. Both the Trump and Obama administrations have strongly urged states to repeal CON laws. 

The Mississippi Department of Health is the central planner tasked with administering the state’s CON program. The Department’s CON Review program applies to “the establishment of new healthcare facilities, the offering of defined new institutional health services, and the acquisition of major medical equipment.” Some of the covered services include: Open heart surgery, in-patient rehabilitation services, chemical dependency services, radiation therapy services, diagnostic imaging, nursing home care, home health services, ambulatory surgical services, and long-term care hospital services. In some cases, such as for skilled nursing facilities, no CONs are being issued at all due to prohibitions enacted in the early 1980s. 

Recent studies by economist Thomas Stratmann demonstrate that non-CON states have more hospital beds per capita, more rural hospitals, and more access to MRI machines. Stratmann also found that healthcare providers in CON-law states “tend to provide lower-quality services” and that “deaths from treatable complications following surgery and mortality rates from heart failure, pneumonia, and heart attacks are all significantly higher among hospitals in CON states than in non-CON states.” 

Far from improving healthcare outcomes for the poor, as some claim, CON laws actually have a disproportionate impact on low-income consumers. They also correlate with negative healthcare outcomes for minorities. Researchers have found no evidence that CON laws result in more uncompensated/charity care — a supposed benefit derived from protecting hospital monopolies in low-income and rural areas. 

This bill would require a three/fifths vote for passage.

MCPP has reviewed this legislation and finds that it is aligned with our principles and therefore should be supported. 

Read HB 1214.

Track the status of this bill and all bills in our legislative tracker


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