Dr. Robert Brown: CON laws leave patients fewer options

April 18, 2022

“Repeal of the current South Carolina CON laws will establish fair competition which will lead to more choices and access to care, greater value, and higher quality care.”

“CON laws were designed to provide oversight and prevent wasteful duplication of services. However, there has been severe overshoot of those goals resulting in suppression in new facilities and services.”

“As such, patients have fewer options and choices in care. This has resulted in virtual monopolies in many SC communities, with higher costs and lack of competition based on outcomes and quality.”

“Several major changes in healthcare economics unseen when CON laws were adopted have amplified the negative impact of CON by decreasing competition. Previously, hospitals were local in control and focus, and provided the infrastructure for care. They worked in tandem and cooperation with physicians to decide and implement healthcare infrastructure for the communities. Through mergers and consolidation, local hospitals are now controlled by regional, statewide, or even multi-state healthcare corporations.”

“Simultaneously, physicians have increasingly left private business for employment by those same healthcare systems, with over 60% of physicians in SC now employed. As such, they are no longer able to serve as a balance or counter to the corporate decisions.”

“Therefore, we now have healthcare corporations with oversized power and control in most communities in SC. With little competition and limited choices, patients are often forced to seek care at higher cost centers such as hospitals or outpatient departments (HOPD) instead of lower cost ambulatory surgery centers (ASC), imaging centers, cancer centers, therapy centers, etc. For example, the same surgery performed at an ASC is 60% cheaper than if performed at an HOPD! So there is bias built in for the corporate healthcare systems to avoid building lower cost options, and to oppose their competition from doing so as well.”

“These corporate hospital systems are also able to use the CON process to object as ‘affected parties’ to any projects proposed by physician groups, other private companies, or public entities – they essentially have a legal ‘veto’ which they can and do use to discourage competition, delay it, or tie it up in costly litigation. Amongst themselves, the systems can then barter – ‘I won’t object to your new radiation center if you don’t object to my new surgery center.’”

“But small businesses such as physician groups cannot engage in the same horse trading, which de facto blocks their ability to invest in new healthcare facilities which would benefit their practices and their patients. Would the state ever sponsor a system in which Publix or Harris Teeter could block Farmer Smith from selling his vegetables at a local produce stand based only on their opposition to having competition?”

“When we were considering leaving employment by a large private system, several administrators there said, ‘you cannot exist in private practice in a CON state,’ as a threat – that without the ability to build an ASC we would not be able to build a business and compete. So they were in essence again using the CON hurdle as a barrier to our success in hopes of forcing us to remain under their ownership. I believe that this is a widely-held fear amongst physicians, one which has been fostered by the systems precisely to maintain a physician labor pool with little choice but to accept their employment status. The lack of a vibrant independent physician culture only furthers the stranglehold of hospital system control.”

“In addition to higher costs and limited access and choice, in highly consolidated situations there is little if any impetus for quality – if patients have no options, they go to the only place available. We need more options in order to foster competition not only on cost, but on safety and quality outcomes for patients; and after all, isn’t that what all of us are really in business to provide?”

“SC is a state which values fair competition and the right to work. The current CON has altered the balance and created an unfair and non-competitive advantage for increasingly monopolistic healthcare corporations over small businesses including physician groups. I do not believe that the government wants to continue to propagate anti-competitive behavior which stifles small businesses and entrepreneurs, reduces patient access and choice for high quality care, and artificially props up higher costs.”

Dr. Robert Brown, MD FACS
Greenville, SC