Benevolent Oversight by Pat Conrad MD

Doug would be justified in banning me forever from this site for quoting a story from Vox, but scan Twitter long enough and a broken clock, and a blind squirrel, etc., etc…

Dr. Gajendra Singh was charged $1,200 by his local hospital for an outpatient abdominal ultrasound, and decided he could do better.  So he moved to open his own imaging center, where he would offer ultrasounds for about $250, x-rays for $70, and echocardiograms for $300.  And this sneaky so-and-so actually had the gall to (gasp) post his prices.  Sound familiar?  Lower prices, quicker service, and win-win for consumers and seller alike.  Enter government to louse it up.

Dr. Singh is a surgeon who performs liver transplants and surgeries for GI cancers.  He often has to order an MRI, the average charge for which in his area is about $1,200.  Singh’s imaging center would cut that charge to between $500 and $700.  His cost to buy a stationary MRI would be somewhat less than $750,000.  But before making that investment, he would first have to have a Certificate of Need, which might cost up to $400,000 and last for only 3 years.  And he could only get that after applying for the CON, which application could (would) be opposed by local competitors.

“Under North Carolina’s law, a medical provider must obtain a government permit (a ‘certificate of need’) if they want to offer certain new services or buy new equipment. But first, every year, state officials will make a determination about whether certain services are needed in different places.  If the state has decided an area doesn’t need a service, then other providers are barred from even applying for a permit.”

Ah yes, the good ol’ CON, the device begun back in the 1960’s as a way for the federal government to use the states to control health care services.  The CON laws “were well-intentioned, with the goal of exercising strong oversight of new health care providers.”  Every central-planning failure is always propped up with the honorifics of good intentions as though that matters.  What the CON laws actually accomplished was to concentrate power in the hands of existing health care facilities, allowing them to thwart new competition as government-protected local monopolies.  Though Congress repealed this stupid interference in 1986, many states still cling to it, including North Carolina where Dr. Singh practices.  “Don Taylor Jr., a health policy professor at Duke University … noted that there are concerns about unnecessary scans if the rules are rolled back and about nixing them for other services.”  Concerns for whom, exactly??  Why is this the business of an academic, or politician, or anyone else other than the physician and patient?  These presumptions arise from the idiot notions of public resource management and treating health care first and foremost as a blessing bestowed by government.  The predictable results have been the inflated prices and reduced access that come with reduced competition.

Dr. Singh is taking his fight to the North Carolina Supreme Court, citing precedents that these CON laws are monopolistic, and violations of equal protection.  Of course he is right, but it appears that the state government and regional hospitals are hoping Singh will be defeated.

I have argued for years that health care should be like tire stores, and that they should be built on every corner on the street if the owners felt it worth the investment.  Groceries, clothing, hardware, and auto parts…every other necessary component of daily living is easily obtainable at the retail level, with large variations for price and quality, as the market dictates.  What makes health care so damn special?

Certificate of Need and Stark laws are stupid and an immoral overreaches of government power.  The de facto presumption that government must provide health care fuels these market restrictions, which in turn hurts consumers.  This physician-investor wants to provide a cheaper service, and the government is standing in the way.

I wonder what would happen if some smart bureaucrat figured out how to apply CON laws to primary care?

119800cookie-checkBenevolent Oversight by Pat Conrad MD