While Michiganders rose to the challenge of flattening the curve of hospitalizations during the COVID-19 pandemic, they also saw serious shortcomings in various public policies that need to be addressed. Temporary reforms to those policies helped the state respond to the immediate threat, but the pandemic has revealed a need for permanent reforms that the Mackinac Center has called for.
In one of the most significant reforms, Gov. Gretchen Whitmer adopted one of the Center’s recommendations when, in March, she suspended the state’s certificate of need laws. CON laws, as they are called, limit the number of hospital beds and specialty wings in hospitals, as well as many services, such as diagnostic imaging. They do this by requiring professionals and service providers to go to a bureaucratic board to seek its permission. The 11-member CON Commission is appointed by the governor and confirmed by the state Senate, and is empowered to review plans for expanded facilities or services – ultimately deciding whether a proposed expansion can go forward. Members of the commission represent hospitals, health care professionals, employers and big labor unions, meaning that petitioners often must get the approval of special interests and operators they compete with.
In the 1970s, Congress was concerned that hospitals would overextend themselves by buying equipment and expanding services that were not financially feasible. So, in an attempt to limit the supply of services to match the expected need, it required states to enact CON laws if they wanted to get certain federal aid. The assumption was that these laws would keep increases in medical spending in check.
Within a decade, though, it was clear that CON laws were ineffective at controlling costs. In fact, there was evidence that they raised prices for patients by restricting competition in the health care marketplace. Congress repealed the mandate, and many states — though not Michigan — began repealing their laws in the 1990s.
This year, Sen. Curt VanderWall has advocated several bills to scale back Michigan’s CON laws. Some reforms would let health care providers invest in new services and facilities without getting an official approval, as long as the investment is below certain thresholds. Others would remove the CON requirement for adding psychiatric beds or air ambulance service, a desperately needed change.
These are positive changes, but Michigan should ultimately act to repeal all CON laws. Research and experience show they reduce access to health care, increase its costs and decreases its quality. So far, 12 states have made this move and another two dozen or so have fewer CON laws than Michigan.
In our state, the cost of CON laws can be measured in nearly 13,000 fewer hospital beds, 20 to 40 fewer hospitals offering MRI services, and 60 to 85 fewer hospitals offering CT scans. And that’s just a start.
It’s clear. Michigan policymakers, with the support of the Mackinac Center, must move toward repealing these costly restrictions. If they do, state residents will have greater access to the critical health services they need, at prices they can afford.