Reform CON Laws To Increase Hawaii Healthcare Access

by Keli‘i Akina

Who do you think decides whether Maui needs a new cancer center, Kauai needs a new hospice, or the North Shore needs a new drug treatment facility?

Well, you might be surprised to find out it’s not the investors who want to build the facilities nor the doctors or nurses who would provide the services there or even public demand. Instead, it’s state government bureaucrats who call the shots.

Yes, strangely enough, if officials at the Hawaii Health Planning and Development Agency say there is no need for a new healthcare facility or service, then it doesn’t matter who disagrees with them. Healthcare providers cannot build a new hospital, MRI machine, or dialysis center without state government permission.

Why? Because of an obscure series of Hawaii regulations called “certificate of need” or CON laws. CON laws are a relic of a different time when states worried about the potential negative impacts of duplicating healthcare services in an area. But what is “duplication” when it comes to healthcare services?

According to Matthew Mitchell, a guest on a recent episode of my “Hawaii Together” program on ThinkTech Hawaii, duplication “is what economists — and, frankly, what normal people, I think, everywhere — call competition. So [CON laws are] essentially mandating that there not be any sort of competitive provision of healthcare.”That being the case, should we be surprised that some of the biggest supporters of CON laws are existing healthcare providers who want to avoid competition?

Mitchell, who is a senior research fellow at the Knee Center for the Study of Occupational Regulation at West Virginia University, said in some states — including Hawaii — existing providers are even allowed to participate in the CON approval process, to give their opinion on whether a potential competitor is needed or not.

It’s a lot like letting Starbucks vote on whether a different coffee shop can open in the neighborhood.

Mitchell said researchers have examined whether the justifications for CON laws hold up, and the answer is a resounding “no.” Despite the claims of their supporters, CON laws actually make healthcare more expensive and less accessible. Mitchell said more than 400 tests have assessed how CON laws affect access, cost and quality of care, “and it’s really extraordinary in terms of how overwhelming the evidence is” that CON laws reduce healthcare access and quality.

In recent years, many states have been reforming or repealing their CON laws in response to these findings. But not Hawaii. In fact, our state requires certificates of need for more healthcare services than any other — even for burn units.

“Whenever I see that one, I scratch my head because one of the original rationales for a CON is to discourage providers from offering care that’s not needed,” said Mitchell. “I don’t think there’s any evidence, anywhere, that has ever been accumulated to suggest that doctors are offering burn care when burn care is not needed.”

It’s so obvious that leaving it up to the government to decide whether we “need” another burn unit, MRI machine or new hospital only results in delays, added expenses and fewer options for patients.

Other states have successfully reformed their CON laws without any negative effects on patient care. In fact, most of them have seen improvements in healthcare access and quality.

It seems to me that what we really “need” is to reconsider Hawaii’s overly restrictive certificate-of-need laws and let entrepreneurs, investors, doctors and the public in general make their own healthcare investment decisions.

KELI‘I AKINA is president and CEO of the Grassroot Institute of Hawaii

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