RALEIGH, N.C. — North Carolina is poised to enact significant health care reform as Senate Bill 370 advances through the legislative process, potentially eliminating many outdated Certificate of Need (CON) laws. Having passed the state Senate with strong support in April, the bill is now in the hands of the House Rules Committee, which is reviewing a similar companion measure.
The urgency for reform is evident. North Carolina currently faces the highest health care costs in the United States, with residents burdened by rising premiums and out-of-pocket expenses.
For years, the North Carolina General Assembly has paved the way for fiscal responsibility and market-driven solutions. Yet, the CON laws have remained a barrier to progress—an outdated system that hampers competition and limits consumer choice.
Originally enacted in the 1970s, Certificate of Need laws were established to manage healthcare expenses by restricting unnecessary services. The intent was to require state approval for new hospitals and advanced medical technology, all with the goal of enhancing efficiency in care delivery.
However, these regulations have led to a cumbersome bureaucratic framework where established hospital systems often block new entrants into the marketplace. Physicians or private entrepreneurs wishing to open outpatient facilities or acquire advanced diagnostic equipment must navigate a minefield of regulatory hurdles, including potential lawsuits from existing providers intent on defending their market share.
Critics argue that this form of protectionism undermines access to quality care and stifles competition. As a result, patients—especially those in rural areas—are left at a disadvantage. Hospital monopolies can quash new clinics that could provide essential services closer to home, often sitting on Certificate of Need approvals without utilizing them.
Research shows a clear negative impact of CON laws on health care access and affordability. A recent study illustrated that states that abolished their CON laws experienced noticeable declines in health care spending, highlighting how increased competition can lead to better outcomes and cost savings.
In North Carolina, nearly 25 healthcare services and technologies are still bound by CON regulations, from mental health facilities to imaging equipment. This approval process effectively places essential health services under bureaucratic control rather than letting market dynamics dictate demand and supply.
Senate Bill 370 seeks to dismantle these regulations by removing CON requirements for several critical services, including ambulatory surgical centers, MRI equipment, behavioral health beds, and specific cardiac diagnostics. The aim is to allow innovators and entrepreneurs to enter the market freely, promoting greater access and affordability.
The proposed bill does not restrict larger health systems from expanding; rather, it opens the field for fair competition, benefiting consumers who ultimately should dictate the available healthcare options.
As the bill awaits action in the House Rules Committee, proponents urge lawmakers to disregard the alarmist claims from hospital lobbyists, who argue that repealing CON will disrupt access to care. The market for healthcare is ready for reform, as are the entrepreneurs eager to serve the needs of patients.
Now is the time for North Carolina’s legislature to take decisive action towards meaningful change in the state’s healthcare landscape.
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