COVID-19 increases calls to repeal certificate of need laws that limit state’s medical capacities

Medical services are critical during the coronavirus pandemic. But many states artificially limit the number of providers by requiring businesses prove their services are “needed.” And who gets to weigh in on that decision? Not their prospective customers, but their established competitors.

The Wall Street Journal published an op-ed by Mollie Williams and me about the irrationality of these “Certificate of Need” (CON) laws in the current crisis. In it, we tell the stories of three medical transportation companies prevented from serving customers:

Take Ezras Nashim, which means “Helping Women” in Hebrew. This volunteer group of female EMTs would like to operate an ambulance to serve Hasidic women in Brooklyn, N.Y. Given the community’s strong practice of modesty, many Hasidic women prefer to receive medical care from other women.

Ezras Nashim last year applied to New York City’s Regional Emergency Medical Services Council for a certificate. But competing ambulance companies testified at the group’s hearing that another provider wasn’t needed. Despite pleas from women in the community, the council denied Ezras Nashim’s application….

As Covid-19 cases soared in New York, emergency workers reported lagging ambulance times and described the city as a “war zone.” Yet Ezras Nashim was forced to stand by as its community suffered. Gov. Andrew Cuomo pleaded with medical workers to come from other states to help, but the irony is that his own state’s laws prohibited local medical personnel from responding to the crisis.

Thirty-six states plus the District of Columbia have CON laws that limit medical supplies and services. Twenty-two states have already relaxed their laws during the crisis.

PLF has written open letters to the other 14 states to do the same, in order to liberate health care providers to service patients.

For instance, we wrote in support of Brewster Ambulance Service, a family-owned business that provides transportation to sick and disabled people in Collier County, Florida. Although they are based in Naples, they are willing and able to provide transportation to coronavirus patients in other counties, but are prohibited by the state’s Certificate of Need laws. We asked Gov Ron DeSantis to suspend Florida’s CON law, an important step given the state’s elderly population.

CON laws are irrational under normal circumstances, but they are especially harmful during a pandemic, when medical providers must be free to adapt to quickly changing circumstances. As we explain in the op-ed:

Regulators justify certificate-of-need laws as ensuring “adequate supply” and promoting affordable health care. But decades of research reveals they drive up prices and cause shortages. A 2017 study from the Mercatus Center found that certificate-of-need states have 30% fewer hospitals per 100,000 residents.

PLF has successfully litigated against CON laws for moving companies, and we are currently challenging Kentucky’s CON law for non-emergency medical transportation in federal court. But now is the perfect time for states to reconsider their policies and get rid of CON laws for good.

Liberating healthcare is just one step that’s needed to help Americans rebuild their lives and livelihoods after the devastation caused by the current crisis. PLF is focused on freeing Americans to rebuild by unleashing our entrepreneurial energies and getting government out of the way.