Critics of ‘Certificate of Need’ regulations say COVID-19 pandemic shows why it needs to be repealed

June 1, 2020

PPI Senior Fellow Oran Smith was interviewed by WIS News 10 regarding the potential for a full repeal of CON laws in light of COVID-19 and action taken by Governor McMaster. PPI Visiting Fellow Dr. Marcelo Hochman was also interviewed.

This article, and accompanying video, originally appeared on WIS News 10. Written by Jason Raven. 

Dr. Marcelo Hochman is the president of the Charleston County Medical Society.

He said one of their legislative priorities for the last few years has been to ask lawmakers to repeal “Certificate of Need” laws in the state.

“Certificate of Need” regulations were mandated by the federal government in the 1970s. According to DHEC, their purpose is to promote cost containment, prevent unnecessary duplication of health care facilities and services, guide the establishment of health facilities and services which will best serve public needs, and ensure high-quality services are provided in health facilities in South Carolina.

According to the Palmetto Promise Institute, so far, 15 states have repealed these “Certificate of Need” laws.

Earlier this year, Governor Henry McMaster temporarily waived these regulations because of the COVID-19 pandemic allowing hospitals to increase their bed capacity or services related to the pandemic.

“A law that’s good enough to be lifted during an emergency is probably a law that should be lifted permanently,” Dr. Hochman said.

He also said the pandemic is shedding light on important issues related to medical care.

“It is highlighting a problem that we don’t have alternatives,” he said.

Opponents of “Certificate of Need” laws said the regulations can be restrictive. Oran Smith, a Senior Fellow with the Palmetto Promise Institute, said these laws limit choices for patients if they were to be repealed South Carolinians would have to pay less to get care.

“We think that will be one of the benefits,” he said. “When there’s competition, prices go down and patients pay less.”

The South Carolina Hospital Association said they believe these regulations should be reformed but not fully repealed. Allan Stalvey, an executive vice president for the South Carolina Hospital Association, said “Certificate of Need” laws keep access to care available for everyone.

“Hospitals aren’t just building rooms just to build. They have to justify it from a business perspective and they are not going to go out and spend that capital,” he said.

Stalvey said they would like to see the appeals process tweaked and sped up. He said it could take years for issues to be resolved.

Right now, 35 states and the District of Columbia have “Certificate of Need” laws in place.