by Ron Shultis and Naomi Lopez
Imagine Kroger having to ask a government board, made up of its rival grocery stores, for permission to open a new store in your town. It is unlikely that Whole Foods and Publix are going to say yes, which would leave most towns and cities with far fewer options for buying their groceries. As absurd as this sounds, this is what happens in Tennessee when a new hospital or home care service wants to establish new facilities and services.
The original idea behind these government permission slips, formally known as certificate of need or “CON” laws, was that these government boards could control costs by making sure facilities and companies didn’t overinvest in facilities and equipment. Not too surprisingly, fewer options for health care have had the opposite effect, and in a rare moment of learning from its mistakes, Congress later repealed the original law that established this system that had required states to follow suit. Yet to this day, Tennessee, along with 35 other states, still have CON laws on the books.
In a recent report, the Beacon Center of Tennessee and Goldwater Institute revealed that Tennessee’s outdated CON laws have left Tennesseans with fewer medical treatment options, including some areas of the state being consistently denied emergency facilities. According to the findings, would-be providers are no longer bothering to attempt to provide new services as evidenced by a dramatic decline in applications to provide new services and facilities – while the state’s population explodes, driving the need for additional services. Areas such as Chattanooga and Cleveland have been the hardest-hit as they are experiencing the highest percentage of denials for new facilities and services.
But these CON laws don’t just deny and limit access to care; they deny Tennessee communities of hundreds of millions of dollars in economic investments and jobs. For example, denied applications for new outpatient services, known as ambulatory services, deprived Knox County alone of roughly more than $80 million in direct investment and the greater Knoxville-Morristown area of over 1,000 jobs. These denials cost the Tri-Cities area roughly 50 new jobs in ambulatory services and more than $160 million in investment alone in Washington County. Vetoed projects deprived the Chattanooga and Cleveland area of roughly 150 jobs and more than $70 million in lost direct economic investment.
Tennessee lawmakers have taken some important first steps to repeal some of these outdated laws in 2017 and 2021 but now is the time for them to finish the job. Tennessee is a global tourist destination and magnet for people seeking to relocate. The state’s relatively low cost of living, great music, world-class restaurants, zero income tax, outdoor recreation, and natural beauty make it hugely desirable. Since CON laws were first adopted, Tennessee has transformed from a sleepy Southern state known for country music to a national hub for shipping and logistics, auto and other advanced manufacturing, and a growing tech sector. However, Tennessee’s place as an economic leader is in danger if Tennesseans are unable to live healthy lives and access the care they need.
Tennessee’s pro-growth economic policies and forward-looking vision has made it a national leader in the 21st century economy. Health care shouldn’t be left behind. It is time to once and for all abandon the CON laws that were created in the 1970s and are now holding the state back, as well as limiting access to health care options. Tennesseans don’t ask permission to shop at a new grocery store, buy a car from a new dealership, or shop at a new department store. They certainly shouldn’t have to rely on a government permission slip to access need health care either.
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Ron Shultis is the director of Policy & Research at the Beacon Center of Tennessee; Naomi Lopez is the vice president of Healthcare Policy for the Goldwater Institute and Senior Fellow for Healthcare at the Beacon Center of Tennessee; Amanda Hagerman is the health care policy analyst for the Goldwater Institute. First appeared at The Center Square.
Photo “Doctor and Patient” by RODNAE Productions.
