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Repeal Virginia’s Certificate of Public Need Program

Virginia’s Certificate of Public Need system is a dinosaur that needs to be repealed. It is anti competitive and probably has made medical costs higher than they should be rather than contain costs as is it’s stated goal. When a medical facility wants to expand, or a new facility is planned, it is the goal of this program to make sure competition doesn’t harm existing facilities in the area.

In other words, it is supposed to make sure extra competition doesn’t reduce the profit margin of existing facilities.

Free market be damned!

According to the Virginia Department of Health, COPN

The Virginia Certificate of Public Need (COPN) program requires owners and sponsors of identified medical care facility projects to secure a COPN from the State Health Commissioner prior to initiating projects such as general acute care services, perinatal services, diagnostic imaging services, cardiac services, general surgical services, organ transplantation services, medical rehabilitation services, psychiatric/substance abuse services, mental retardation services, lithotripsy services, miscellaneous capital expenditures and nursing facility services. The program seeks to contain health care costs while ensuring financial viability and access to health care for all Virginia at a reasonable cost.

No certificate of public need may be issued unless the Commissioner has determined that a public need for the project, or portion thereof, exists and has been demonstrated. There are criteria or factors used in determining whether a public need exists. The criteria include: (i) the relationship of the project to the long term health care state plan, (ii) the need for enhanced facilities to serve the population of an area, (iii) the extent to which the project is accessible to all residents in the proposed area and the immediate economic impact and financial feasibility of the project.

The one sentence in this “mission statement” that can be identified as the most ludicrous statement in the whole statement is “The program seeks to contain health care costs while ensuring financial viability and access to health care for all Virginia at a reasonable cost.”

Who exactly determines what a “reasonable cost” is? Bureaucrats that determine what constitutes “affordable” Health Care?

The program seeks to use the heavy hand of government to balance competition with viability of existing facilities. An admirable goal, but one that is impossible to achieve. Politics always gets in the way of government price fixing and controls.

When a small care facility is planned, of course the larger medical facilities will be opposed to the competition. And they will spend whatever it takes to keep their exclusive services exclusive. And eliminate any and all competition. And most of these medical facilities already have cozy relationships with those making the decisions or appointing the decision makers. And the result is less competition and higher costs.

And it is atrocious to know that a portion of what a patient at the larger facility pays includes money that will go to lobbyists to keep the competition away. So the patient is actually paying a portion of the lobbying costs that inflate his bill. That would be ironic if it weren’t so deplorable.

The Richmond Times Dispatch had an article yesterday that raised some excellent issues on the COPN issue. The article recounts the sad story of Virginia Senator Creigh Deeds and the tragedy that occurred between the Senator and his son Gus. Gus had some mental health challenges and was hospitalized by a court order. However, Gus was released because there was a lack of beds to accommodate him in the area. Within hours, Senator Deeds was stabbed multiple times and his son was dead from a gunshot wound. All because there was a shortage of facilities to treat Gus Deeds.

The article goes on to say:

Virginia’s certificate-of-need process requires health care providers to get a permission slip from the state before they can expand, build new facilities, or even purchase certain equipment. Congress mandated the system decades ago to counteract a badly designed federal reimbursement system under Medicare. Eventually it changed the incentive structure and allowed states to repeal their CON regulations. Some did. Virginia didn’t.

And the state has a powerful reason not to: the hospital industry. Hospitals like having a big government bureaucracy protect them from upstart competitors. Indeed, just a few weeks ago Sean Connaughton, the president of the state’s hospital lobby, wrote a letter purporting to explain why his members deserve special treatment. Like every other industry seeking favors from the state, he claims health care is different.

The Justice Department and the Federal Trade Commission don’t find that persuasive. To the contrary, they write, “empirical studies indicate that CON programs generally fail to control costs and can actually lead to price increases (and) risk entrenching oligopolists and eroding consumer welfare.” When a government agency concludes a government program isn’t working, that says a lot.

It is time we repeal this antiquated law. Competition and free markets are far better at controlling prices than government bureaucrats. Let free markets decide what medical facilities a community needs and can support.

Repeal this law.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

2 Responses to “Repeal Virginia’s Certificate of Public Need Program”

  1. Zach Werrell

    Vince Haley has publicly stated his support for REPEALING COPN laws many times. The only candidate to do so.


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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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