Op-Ed: Certificate of need reform could help boost health care outcomes

Did you know that Mississippi spends a higher share of our overall wealth on health care than almost any other state in America? Yet despite this, we still have some of the worst health outcomes in the country.

Some believe the answer is to spend an even larger amount by expanding Medicaid. Mississippi’s House of Representatives has just voted to do precisely that.

The debate over Medicaid expansion now appears to hinge on whether under the expansion scheme, there will be any realistic work requirement. Critics fear that without a robust requirement for recipients of free health care to be in work, Medicaid expansion is little more than a something-for-nothing system of soft socialism.

It remains to be seen if the Senate will support the House’s bill, and if it will do so by a large enough margin to overturn any future gubernatorial veto.

There is, however, another proposal that has attracted far less attention, which would really improve health care in our state.

Health care in Mississippi is deliberately restricted by a set of laws known as certificate of need laws. These laws require anyone wanting to expand existing services or offer new services to apply for a certificate of need permit. By not issuing licenses to new operators, competitors are kept out of the market, which suits the existing providers.

Our recent report on certificate of need reform shows how harmful this red tape can be. If we removed this protectionist red tape, we would get far more bang for our buck, however much the legislature decided to spend on Medicaid.

Florida, Tennessee, North Carolina and South Carolina have all recently removed their CON laws, and they each have significantly better health care.

Now there is a chance that Mississippi might do something similar. State Rep Hank Zuber’s excellent bill (House Bill 419) opens the possibility that some CON rules could be repealed.

Of course, now that the bill is before the House, every sort of parasitic vested interest is frantically lobbying to kill the bill.

Why? CON confers on existing providers a means to legally exclude the competition.

Imagine in the search engine Yahoo! had been able to use CON laws to shut down Google? Or if Friends Reunited could have used CON laws to prevent Facebook? Or if the folk that made DVDs could have used CON to prevent Netflix from taking off? CON laws have been doing precisely this to health care in our state.

CON laws in Mississippi are one of the last vestiges of the good ole boy system that has held Mississippi back.

Douglas Carswell is the President & CEO of the Mississippi Center for Public Policy.