“Certificate of need (CON) laws exist in various forms in 38 states and Washington, D.C. The stated goal of such laws is to keep costs down by preventing overinvestment in any single market. If regulators decide an area already has enough of any type of service, they can block new construction.
As a result, nobody in North Carolina can open or expand certain medical facilities without these regulators’ permission. Even purchasing an MRI scanner without their approval can be illegal. These restrictions prohibit Singleton from using his own clinic in New Bern for most of the surgeries he performs. He must drive two miles up the road to a competitor’s office, as it is owned by a major health care player. This unnecessary red tape increases costs and decreases scheduling options, and patients suffer.
Singleton has battled this scheme since he set up his clinic in 2024. Frustrated by a wall of bureaucracy and lack of progress, he sued in 2020 with representation from our public interest law firm, the Institute for Justice.
Getting to trial has not been easy. Wake County Superior Court tossed out his case in 2021 without discovery or witness testimony, and the North Carolina Court of Appeals upheld that decision in 2022. The state Supreme Court ruling simply allows Singleton to go back and try again.
Singleton is not alone in this struggle. The Iowa ophthalmologist Lee Birchansky fought for more than 20 years before state regulators relented and gave him permission to perform surgeries at his own clinic. In 2016, Virginia fended off a CON lawsuit from pulmonologist Mark Baumel and radiologist Mark Monteferrante. Kentucky spiked a home health care service that entrepreneur Dipendra Tiwari tried to launch in 2019. Connecticut blocked a cancer treatment center in 2022, clearing the way for political insiders to proceed unimpeded with their own cancer treatment center 45 miles east. None of these cases involved health or safety concerns.
CON laws work great for existing providers, who do not have to worry about rivals setting up shop and attracting patients with superior service. This also means existing providers can also take their doctors and nurses for granted, as CON laws keep rivals far away, limiting their ability to poach talent.
California, Texas, and 10 other states operate without CON laws. None of these states has experienced any measurable harm. In fact, multiple studies show benefits. For example, Matthew Mitchell, a researcher at George Mason University’s Mercatus Center, says states that got rid of their CON laws have more hospitals and surgery centers per capita, along with more hospital beds, dialysis clinics, and hospice care facilities.”
https://reason.com/2024/10/29/doctor-fighting-to-break-certificate-of-need-barrier-in-north-carolina