Senators hear Testimony on Removing SC’s Certificate of Need Program

Healthcare
May 13, 2021

Lawson Mansell

Policy Content Manager

Yesterday, a Senate Medical Affairs subcommittee heard testimony on S.290, the bill to completely repeal South Carolina’s Certificate of Need (CON) laws.

To those who have not been following, the CON issue has captivated the Senate over the last few weeks. A Certificate of Need program, often called a Competitor’s Veto, forces new providers to apply for permission slips from the state in order to expand, build, or acquire certain medical equipment and facilities.

Competing healthcare providers (usually large hospitals) are able to contest these applications and prevent competitors from entering the market. Providers can appeal to an Administrative Law Court but that often takes time and money that smaller operations do not have.

The program not only hurts the smaller providers but also hurts patients because it leads to a de-facto monopoly where hospitals can charge higher prices, and patients are left with little options.

Senator Wes Climer, the bill sponsor, has been leading the fight on repealing CON and opened yesterday’s testimony by arguing in no uncertain terms that CON cannot be reformed and must be repealed in its entirety: “This system is so broken, the concept is so deeply flawed. If our interest is expanding access and lowering cost, there are no other options besides complete repeal.”

He also made sure to discuss, as he did on the Senate floor a couple weeks ago, the adverse effect CON has on patients in South Carolina: “The real damage in the Certificate of Need program is in the unseen, the denial of care and the inflation of cost in healthcare.”

This was further confirmed by testimony from Matt Mitchell with George Mason University’s Mercatus Center, one of the leading research organizations on CON laws: “We don’t have to speculate about what happens without Certificate of Need. There’s an abundance of evidence that patients would enjoy higher quality care and less costs.” According to Mercatus estimates, South Carolina could add as many as 10 rural healthcare facilities if we were to repeal our CON program!

Those rural providers were also represented. Although he was not able to testify yesterday due to lack of time, Dr. Dion Franga in Orangeburg, SC attended the hearing because he is currently in his own CON battle. Dr. Franga is trying to build an Ambulatory Service Center (ASC) in his hometown of Orangeburg but the local hospital has contested his approved CON.

Franga now must go through the lengthy and expensive process of fighting for the ability to care for patients in his community. You can read his Op-Ed which chronicles his current battle in the Orangeburg Times & Democrat.

Dr. Rob Brown, a surgeon from a small practice in Greenville, shared his story as well, noting that in his experience CON is a barrier to small providers: “The CON process props up a development of monopolistic healthcare systems.”

Arguments for repeal also came in this week via an Op-Ed in several Upstate papers from long-time hospital executive and former state representative, Howell Clyborne:

There might have been a time for Certificate of Need laws. But—and I feel my background qualifies me to say this—the time has come and gone. I served four terms in the South Carolina General Assembly, and since that time (and during it), I have worked in the health care industry. From both of those perspectives, I can tell you that in 2021 CON laws are hurting our state.

The hearing yesterday in the Senate on the future of Certificate of Need in South Carolina was a solid step forward for our CON repeal efforts. More testimony will be offered in the second year of this two-year legislative session (2022), and you can be assured Palmetto Promise Institute will continue to fly the banner for free market solutions and putting patients first.