(The Center Square) — How to proceed with a possible repeal or amendment to Georgia’s certificate of need requirement will likely be a hot-button topic for the foreseeable future.
Leading up to this year’s session, Americans for Prosperity-Georgia launched a six-figure campaign to encourage lawmakers to rescind the CON requirement. Now, a Georgia Senate committee will explore whether the state should amend the CON mandate.
A new Georgia Public Policy Foundation report, authored by Matthew Mitchell, a senior research fellow at the Knee Center for the Study of Occupational Regulation at West Virginia University, and Chris Denson, director of policy and research for the Georgia Public Policy Foundation, found regulations have resulted in diminished availability of health care services and higher costs.
“If you restrict supply, that’s a captive market, and it’s allowed costs to continue to rise,” Denson told The Center Square.
CONs emerged at the state level in the 1970s following a federal law that allowed the federal government to withhold funds from states that did not establish a program. While Congress eliminated the federal incentives for CONs about a decade later, some states, including Georgia, have not repealed their CON requirements.
“We’ve had roughly a dozen or so states since then repeal it,” Denson said. “In Georgia, it’s a state law, so we’re taking state-level legislative action. But probably the biggest reason for it is that we have a situation now where you have very powerful incumbents in the form usually of hospitals and health systems, and it protects them from competition. They obviously have a vested financial interest in preserving the system.”
Georgia officials established the state’s CON program in 1979, though state officials began reviewing health care projects in 1975. According to the Georgia Department of Community Health, CON regulations “measure and define” the need for a facility, aim to keep costs in check and ensure Georgians have access to health care.
“Hospitals and health systems have shifted the debate toward, we need CON because we have to treat everyone that comes through the door, regardless of their ability to pay,” Denson added. Effectively, the argument is “we need to preserve our elective surgeries, our imaging in order to make financial profits on our areas where we lose money. But CON was never intended to be that way.”
The Georgia Alliance of Community Hospitals has voiced its opposition to repealing the CON requirement.
“Hospitals in rural communities are often the first or second largest employer, most often right behind the school system,” Denson said. “In metro Atlanta, three of the top four largest employers are health systems.
“And so politically, not only are these community health care providers that have very powerful lobbies and are willing to spend millions to preserve their certificate of need, but they also have the jobs argument to fall back on: we’re employing all these people,” Denson added. “Obviously, they’re very strong politically, and that’s probably why you’ve seen a lot of inaction at the state level, not only in Georgia but in most states, given those factors.”
By T.A. DeFeo | The Center Square contributor
