Unshackle Nebraska’s Healthcare: Repeal CON Laws to Expand Access and Lower Costs
Nebraska’s healthcare industry is handcuffed by certificate of need (CON) laws, and state senators hold the key. CON laws limit healthcare access, prevent growth in the industry, and raise prices. To be competitive with neighboring states and allow Nebraska’s healthcare industry to flourish, legislators must remove the shackles and pass Legislative Bill 437.
CON laws force healthcare providers to prove a “need” for their project. Existing providers can enlist the government to deny competitors permission to establish a new facility, expand an existing facility, increase bed capacity, purchase advanced technology, and more. CON laws stifle new healthcare services. In Nebraska, a CON is required to establish, transfer ownership, or expand the capacity of long-term-care beds or rehabilitation beds at healthcare facilities—including nursing homes. And there is a moratorium for these beds, meaning no CON application can be approved unless it meets one of the few exceptions. It’s not hard to see how this negatively impacts innovation and competition in the healthcare market and limits access to quality healthcare.
Take Butte, a small village in Boyd County. The Butte Senior Living Facility is the only nursing home within 25 miles. Sadly, the nursing home is preparing to shut its doors because CON regulations for the transfer of ownership prevent the village from keeping it open, forcing current patients to transfer to facilities sometimes hours away.
Meanwhile, neighboring states like South Dakota, Kansas, and Colorado don’t have CON laws on the books, Wyoming repealed its last remaining CON law this year, and Iowa is moving forward with a bill to repeal CON requirements for birth centers.
The tide is turning, and states across the country are waking up to the fact that CON laws are preventing their healthcare industries from thriving. Nebraska should follow their lead.
Current legislation allows senators to do just that. Legislative Bill 437 was recently introduced to repeal the Nebraska Health Care Certificate of Need Act. Recent amendments propose to leave CON requirements in place for rehabilitation beds. This is a mistake; removing CON requirements for long-term-care beds is a step in the right direction.
Proponents of CON laws often argue that the regulations help keep costs down and prevent duplication of medical services and facilities. But the truth is, these laws invariably lead to higher healthcare costs and reduced patient access.
Matthew D. Mitchell, a healthcare economist, recently published a report highlighting this fact. After surveying decades of academic literature, he found that people who live in states with CON laws have “access to 30% to 48% fewer hospitals.” Meanwhile, costs in states without CON laws were found to be “5.5% lower 5 years after repeal.” This could mean as many as 40 new Nebraska facilities without CON, with 28 of those in rural areas.
While Nebraska has wisely exempted most healthcare facilities and providers from CON law requirements, others continue to pay the price. And as Butte’s experience shows, the consequences can be dire.
CON laws may be well-intentioned, but it’s not intentions that matter; it is results. And the truth is, CON laws simply don’t work. Forcing healthcare providers to jump through hoops to convince their competitors that they should be allowed to open or expand their capacity to treat more patients is a waste of time and hurts patients. Nebraska should incentivize providers to open facilities, expand treatment capacity, and innovate.
The Nebraska Legislature should pass Bill 437 and remove CON laws for rehabilitative beds and all other healthcare services.
