We have been advocating for freer market healthcare solutions for years and have worked alongside policymakers to make significant strides in our state. In 2016, the state repealed half of the certificate of need (CON) laws and at the time Tennessee ranked the 7th worst in the nation for the most restrictive regulations. CON restrictions still exist for over 25 different services or facilities like neonatal intensive care, open-heart surgery, home health, and hospitals, so there is more work to be done to reform these antiquated laws.
In case you aren’t familiar, CON laws require providers to prove there is an unmet need in a community before they can expand or add new healthcare services in a specific geographic area. In other words, a private company or nonprofit needs to obtain a “certificate” or government permission slip to provide a service. Not only do they have to prove a need exists, but they also have to fight off their competitors—who are already doing business in that community or surrounding communities—from blocking them. These battles for permission often cost thousands, if not hundreds of thousands, of dollars. And these laws have been shown in studies to decrease quality and access to care while increasing the cost of healthcare options in a community.
CON laws put the government in the position to pick winners and losers. This was never more apparent than in the August 26, 2020 meeting of the Health Services Development Agency (HSDA), which is the entity that issues the certificates of need for Tennessee.
Two well-known healthcare companies, Vanderbilt and Ascension St. Thomas, battled it out before the agency with competing proposals for new facilities that were almost across the street from each other in Murfreesboro. The agency heard the proposals simultaneously and the state denied Vanderbilt’s proposal to open a new 48-bed hospital and chose St. Thomas’ smaller satellite eight bed and eight emergency room proposal.
According to the Tennessean, Vanderbilt argued, “Last year, 59,000 patients traveled from this region to [Vanderbilt University Medical Center] for care — 290,000 times, every day last year, on average, 74 Rutherford-area patients were in Vanderbilt hospital beds.”
While St. Thomas’ lawyer Warren Gooch argued, “Contrary to what you just heard from Vanderbilt and their supporters, this project flies in the face of orderly development of health care.”
But why is the government involved in this decision at all? Shouldn’t patients decide what they need in their communities, and shouldn’t competition be a good thing? When the government decides winners and losers, it’s rarely at the advantage of the people it impacts. We need to reform CON laws in Tennessee.