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CT Examiner: Better Health, Lower Costs: One Simple Reform Could Improve Health Care Outcomes

To the Editor:

A new report from the Office of Health Strategies found that health care costs increased far beyond the governor’s stated annual target, public meetings are assured to follow like they did this past summer. Beyond this never-ending insurance debate, however, there is a simple change that would decrease costs and improve real health care outcomes in Connecticut: Repeal our certificate-of-need laws. 

Unlike the combative insurance hearings, a quiet series of task force meetings were also held this past summer — led admirably by State Rep. Kerry Wood. That task force has submitted its final report to the General Assembly. The report, like everything else in health care, is a document that is much longer than it needs to be. 

Certificate-of-need laws have a long and varied history. New York was the first state to implement CONs in 1964, and the federal government later incentivized their adoption by requiring CONs to receive certain federal funding. In 1986, realizing the policies were not leading to better outcomes, the federal government scrapped the requirement. Fast forward to today and many states have repealed or reformed their CON laws giving researchers a chance to examine their effects in greater detail. 

The findings make a clear case for repeal. CON laws are associated with lower quality hospital care, higher hospital and non-hospital expenditures, increased Medicaid and Medicare costs, and they also cause people to travel further for care because the supply of a regulated item decreases. Even when we turn to concerns over equity in health care researchers also find that CONs lead to greater disparities against minority groups and no increase in care for the indigent.  CON laws are also associated with access to less care in rural areas. 

None of this should be a surprise when we review the CON process. To distill it down to its basic essence: Existing health care providers decide whether another provider can exist, expand, or improve. 

Connecticut residents can see the results for themselves. A proposed Danbury Proton therapy center to treat cancer patients was just denied by the CON process through OHS, even though lobbying by Hartford HealthCare and Yale New Haven Health lead to approval for a similar facility. 

To provide a parallel, it would be like having the local Ford and Honda dealership deciding whether Subaru should be allowed to sell cars in town — or allowing just one newspaper to be given a license to publish in Connecticut. In the rare instance the existing firms would allow for new competition, under CON laws they would still have a say in whether the new competitor could expand operations or bring in innovative technology. 

Nobody would support this anti-competitive policy in abstract, and yet we are doing just that in health care right now. 

The General Assembly correctly noted this negative effect during the pandemic when Connecticut, like other states, suspended parts of our CON program. Our elected officials would do well to follow-up on that temporary change by expanding it and making it permanent — as bills introduced by Sen. Ryan Fazio and Rep. Mark Anderson would do. 

We do not need more political grandstanding from elected officials, nor is it necessary to implement a new tax incentive, state-run program, or nuanced regulation to improve health outcomes and lower health care costs in Connecticut — the simple repeal of this law will make a difference. 

Existing providers and some government officials will inevitably push back on the reform, but there is no good reason to continue this harmful policy.

This article originally appeared in CT Examiner.

Bryce Chinault

Bryce joined Yankee Institute after nearly a decade of working in federal and state level policy analysis at the George Washington University Regulatory Studies Center and the Mercatus Center at George Mason University. In those roles, Bryce worked directly with members of Congress, executive agencies, governors, state legislators, and local officials to engage on a diverse range of policy topics and enact positive reforms for everyday people across the country. A native of Cambridge, WI, Bryce moved to Connecticut to be closer to his wife’s family in her hometown of Newtown. Bryce earned a Master of Public Policy degree from George Mason University and a B.A. in Political Science from the University of Wisconsin-Whitewater. He is also the loving father of two amazing kids.

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