Healthcare regulations intended to limit the supply of healthcare services within a state actually limit entry and competition, particularly in North Carolina, according to a recent study by Thomas Stratmann and Christopher Koopman, with George Mason University.
The study found there are serious consequences for continuing to enforce certificate-of-need regulations, and for North Carolina, the programs could mean about 12,900 fewer hospital beds, 49 fewer hospitals offering MRI services and 67 fewer hospitals offering CT scans.
A total of 35 states plus Washington, D.C., currently limit entry or expansion of healthcare facilities through CON programs. However, North Carolina regulates 25 different services, devices and procedures, while states with CON programs, on average, regulate 14, according to the study.
The authors said proponents claim that the CON programs were necessary to either control costs or increase how much charity care was provided, but evidence shows that the programs don't achieve their intended outcomes.
"For policymakers in North Carolina, this situation presents a particularly rich opportunity to reverse course and open the market for greater entry, more competition, and ultimately more options for those seeking care," they concluded.
Mr. Stratmann is a scholar at the Mercatus Center and a professor of economics at George Mason University, and Mr. Koopman is a research fellow for the Project for the Study of American Capitalism for the Mercatus Center at George Mason University.
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