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Hospitals Shouldn’t Need State Permission Slips

In 2006, a Norwich neurology practice with a new $1.5 million MRI scanner had a simple request. It asked the state for permission to use the scanner for all of its patients. The state said, “No.”

For four years the practice had to fight state regulators before it finally got permission to use the scanner the way it wanted to in the first place. If the state had granted permission four years earlier, what would have happened? Would any patients have been injured or harmed? No. In fact, the quality of care could have been higher.

The state regulates the use of MRI scanners – and a host of other health care related devices and practices – through the use of “certificates of need.” These certificates are basically permission slips issued by the state, and they are used to limit the supply of healthcare.

In a new Yankee Institute policy brief, “Does Connecticut Have Enough Healthcare?” released March 26, we say it is time to end the use of certificates of need in Connecticut.

Last year, state regulators used the certificate of need to kill a $500 million investment by Tenet Healthcare in Connecticut hospitals.

Certificates of need were dreamed up decades ago as a way to reduce healthcare spending by reducing the amount of healthcare available. While the policy has reduced the amount of healthcare available, it has caused prices to rise.

Connecticut has more services covered by certificate of need than 32 other states, including 14 states that don’t have any permission slip requirements.

To be clear these certificates have nothing to do with the quality of healthcare, instead they limit the quantity of health care. For example, Connecticut has a third fewer hospital beds per capita than the national average. The certificate of need process is at least partly to blame.

It’s time for the state to stop using certificates of need to regulate the supply of healthcare.

Does Connecticut Have Enough Healthcare?

Yankee Staff

Yankee Institute is a 501(c)(3) research and citizen education organization that does not accept government funding. Yankee Institute develops and advances free-market, limited-government solutions in Connecticut. As one of America’s oldest state-based think tanks, Yankee is a leading advocate for smart, limited government; fairness for taxpayers; and an open road to opportunity.

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