Certificate of Need law bad for S.C.

Against the backdrop of the existing Roper Hospital on Calhoun Street, construction progresses on a clinical services and patient care tower on Thursday August 5, 2004. The project received a certificate of need after a lengthy dispute with competitors. (Wade Spees/Staff)

All eyes are on Congress — at least as far as health care goes. South Carolinians are now waiting to learn what — if anything — Republicans will do to fix Obamacare’s myriad problems, which have rippled across our state’s and our country’s health care systems. But Congress isn’t the only legislative body that can start to fix our broken health care system. So can our legislature in Columbia.

They can start by repealing our state’s “Certificates of Need” — a ridiculous law that deprives South Carolinians of the medical services we need.

Certificate of Need (CON) laws — which date back to the 1960s — limit the number of health care facilities that can open in local communities. “Facilities” includes everything from hospitals to nursing homes. They also require government approval for modifications and additions to existing facilities. Essentially, you can’t open or expand a new health care-related business without proving to the government that the community actually needs it.

In fact, our state’s Certificate of Need laws are so restrictive that existing health care facilities can’t even lay out a new bed for patients without offering regulators definitive proof that the bed is needed. The laws also limit how much equipment health care facilities can purchase for diagnosing and treating patients.

This bizarre system naturally harms South Carolina consumers. Do you think groceries would be cheaper if only one grocery stored existed in your area? And what if the government had to sign off every time one store wanted to add a new aisle? In any other industry, we’d call this a monopoly.

Our state’s Certificate of Need law makes that a reality in health care.

If new hospitals, clinics, or other health care providers want to offer high-quality health care services at a lower cost, they should be able to do so. They shouldn’t have to beg regulators first.

Fifteen other states have realized this and shuttered Certificate of Need laws. The result? Affordable and innovative health care systems that better serve their customers and patients.

Just compare our state to those that have repealed their CON laws. The population of Kansas is only 60 percent that of South Carolina, yet the state contains nearly twice the number of hospitals that South Carolina does. Kansans repealed its CON laws in 1985. It’s the same case in South Dakota, which has only 18 percent of South Carolina’s population but more than 80 percent our number of hospitals.

States bogged down by Certificate of Need laws historically have experienced higher health care costs. For instance: Maryland first established its own Certificate of Need laws in 1968, and only three years later its hospital costs per admission were more than 25 percent higher than the national average. And across the country, states without these burdensome regulations often have some of the lowest levels of spending on hospital services, over-the-counter drugs, and more.

South Carolina took a step in the right direction when Gov. Nikki Haley vetoed funding for the Certificate of Need program in 2013. State legislators sustained the veto, and a number of health care services opened as a result.

But then the South Carolina Supreme Court ruled that the state must continue to administer the program regardless. The health care facilities that opened between Gov. Haley’s veto and the court ruling have no idea if they’re allowed to continue operating.

Our state government should end this confusion by repealing Certificate of Need once and for all. In so doing, they would be looking out for South Carolinians’ best interests. More choice, lower costs, more business investment and jobs — there’s no reason this law should be kept on the books.

And who knows? By repealing our Certificate of Need law, South Carolina might even set an example for legislators in Congress as they begin to debate how to fix the higher prices and fewer choices forced on us by Obamacare.

Dave Schwartz, a resident of Mount Pleasant, is the South Carolina state director for Americans for Prosperity.