How the Free Market Can Increase Access to Healthcare

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February 26th, 2015

Archaic laws and government regulations continue to get in the way of the free market as it works to provide access to health care for this country’s older Americans.  In many cases, these old laws and regulations simply act as financial and bureaucratic barriers for healthcare providers.

A good example is just outside of Washington D.C. in the state of Virginia.  Any hospital in Virginia that seeks to make a major investment – anything from purchasing a CAT scan machine to adding a parking garage – must seek prior approval from the Virginia Health Commissioner. Virginia law requires state regulators to determine whether a hospital’s proposed investment is needed in that community, and if it is, they grant a “Certificate of Public Need” (COPN).  The approval process requires an upfront application fee up to $20,000 and can take up to nine months to complete.  The hospital cannot move forward with its plans without the COPN golden ticket.

Virginia’s COPN law – enacted more than 40 years ago – was designed to keep healthcare costs down, and allow for coordinated planning of services. However, this antiquated law has done nothing but suppress competition, increase costs and limit access to needed medical services.

In fact, in 2004, both the Federal Trade Commission and the Department of Justice found that COPN programs actually contribute to rising prices, because they inhibit competition. As a result, the FTC and DOJ urged states like Virginia, which continue to have these burdensome review processes to “reconsider whether they are best serving their citizens’ healthcare needs by allowing these programs to continue.”

One of RetireSafe’s basic principles is to find free market solutions to our country’s problems.  The Federal Government rescinded the COPN requirement decades ago and most states have also rescinded or structurally changed their own COPN regulations, but some states, like Virginia, have not.  RetireSafe is leading the charge to get this archaic regulation changed or rescinded in Virginia and in other states where it remains a barrier to healthcare access.

Virginia is behind and it’s long past time for it to catch up.  The Commonwealth ranks in the bottom third of the country for its ability to treat overnight patients, and COPN is preventing hospitals from quickly adapting to increases in the demand for emergency care. This doesn’t just impact seniors, it impacts all Virginians.

Access to care should not reside in the hands of state regulators. That is why legislators in Richmond need to streamline the COPN process so that medical facilities and hospitals have the flexibility to make business decisions to better serve local communities. Over the past 40 years, medical advances have transformed our healthcare system but outdated laws like COPN are limiting patient’s ability to access 21st Century healthcare services.

Thankfully, Virginia House Delegate Robert D. Orrock and Senator Stephen H. Martin recently introduced legislation that would streamline the COPN process and provide greater access to medical services.

If we truly want to increase access to care for all Virginians, we must start reforming old laws that inhibit competition and consumer choice.  Now is the time for Virginia to reform its COPN law.

If you  live in Virginia please  take action now!  Click here to send a letter to your state Senator and Representative urging them to vote “YES” on HB 2177  to reform Virginia’s outdated and costly COPN laws.