Removing regulatory barriers has helped hospitals save lives during the pandemic

By | September 8, 2020

As the coronavirus began to spread throughout the country, hospitals have been repeatedly overwhelmed by waves of infected patients who need immediate access to medical care. In response, governors and legislators took groundbreaking steps to waive government barriers that prevent hospitals from increasing the number of beds and adding additional services to care for these patients.

Now, there’s new evidence that shows these decisive actions saved lives.

In August, researchers from Southern Illinois University, Auburn University, and the University of Cincinnati published a new report showing that states which suspended what are known as certificate of need laws, or CON, experienced a significant reduction in the number of patients who died from COVID-19, as compared with states which left these laws in place.

How could waiving these laws dramatically improve the health of sick patients? Because certificate of need laws make healthcare less accessible for patients. They require healthcare providers looking to build a new facility or add new services to prove to a government board that the community needs these additional services.

When a potential new competitor applies to build a new facility, established hospitals routinely lobby the board to reject the application, arguing the community doesn’t need additional healthcare options. In some states, the CEOs of incumbent hospitals sit on these boards.

Proponents of these laws argue that communities need them to limit new competitors from entering the market in order to keep existing providers financially stable. But the reality is that the laws simply reduce the number of facilities available to meet the healthcare needs of patients.

Researchers at George Mason University found that states with CON laws have 30% fewer hospitals and 14% fewer ambulatory surgery centers. Furthermore, the states that impose CON restrictions on hospitals that wish to add new beds to treat sick patients have 131 fewer beds for every 100,000 citizens.

Policy experts have known for decades that CON laws reduce the availability of essential healthcare services. Unfortunately, local interest groups always blocked repeal efforts until now.

Since March, 24 states have suspended CON laws that were reducing access to the services that COVID-19 patients desperately need. Most importantly, these states are easing barriers that prevent hospitals and other healthcare facilities from adding additional beds to care for the influx of COVID-19 patients.

In addition, they are waiving CON restrictions that prevent facilities from purchasing new medical equipment such as ventilators that health professionals need to treat COVID-19.

While these emergency reforms have no doubt saved lives during the pandemic, more lives could have been spared if states had never enacted CON laws in the first place. The recent report goes on to say that the states that had already repealed their CON laws experienced the lowest COVID-19 death rates.

Without these laws standing in the way of new facilities, health providers can quickly add new beds and equipment to respond to the pandemic. In Pennsylvania, which repealed its CON laws in 1996, an outpatient medical facility was converted into a coronavirus hospital. In California, which ended its CON program in 1995, hospitals have constructed new temporary coronavirus facilities.

None of these resources would have existed if these states had kept their CON restrictions in place. As a result, these states have far more facilities, beds, and equipment to treat infected patients.

The new research holds important lessons for lawmakers looking to combat the coronavirus. For decades, entrenched special interests have ensured harmful barriers such as CON laws have remained in place at the expense of patients.

Now, in the most trying of circumstances, lawmakers are finally rolling back these restrictions, reimagining healthcare, and empowering healthcare providers to deliver lifesaving care.

Charlie Katebi is a health policy analyst at Americans for Prosperity.

Healthcare