(The Center Square) – Eliminating a state paperwork requirement on psychiatric hospitals could increase access to behavioral health services in North Carolina, a new study shows.
Released this week by conservative think tank the John Locke Foundation, the study said repealing North Carolina’s Certificate of Need (CON) requirement for psychiatric hospitals could add three psychiatric hospitals in the state and expand access to care for older residents and those fighting substance abuse problems.
North Carolina’s CON law “prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services,” the state agency’s website reads. It also is required ahead of certain medical services.
“The law restricts unnecessary increases in health care costs and limits unnecessary health services and facilities based on geographic, demographic and economic considerations,” the North Carolina Department of Health and Human Services (NCDHHS) also said.
The John Locke study said research shows CON laws are associated with 30% fewer hospitals per capita, 13% fewer hospital beds, 14% longer emergency room wait times and 3% higher spending. Fifteen states have repealed CON laws since the federal government repealed it in the 1980s, research showed.
Providence College Assistant Professor James Bailey said North Carolina has the strictest CON law in the southeast and the third-strictest nationwide.
“CON reform in North Carolina would mean that health care providers, rather than state bureaucrats, could decide where new health services are needed,” wrote Bailey, who authored the John Locke report. “The evidence shows that this would mean more health facilities, better access to care and lower costs.”
North Carolina imposes its CON requirement on hospital beds, beds outside hospitals, equipment, facilities, services and emergency medical transport, according to the Institute of Justice.
The NCDHHS temporarily suspended the CON requirement for beds so hospitals could treat patients during the COVID-19 pandemic. Public health officials have feared running out of space at hospitals during the pandemic and have kept track of available hospital beds daily.
Bailey said if the state eliminated the requirement for psychiatric hospitals, it could increase capacity for care from 15 hospitals to 18 hospitals. Bailey said the repeal would benefit older North Carolinians since 15 or 16 of those psychiatric hospitals would accept Medicare. It also could offer more flexibility to substance abuse treatment facilities.
“Our estimates suggest that if CON were repealed, an additional six treatment facilities would accept private insurance and an additional 12 treatment facilities would accept Medicaid,” Bailey wrote.
States such as New Hampshire and Florida recently have reformed or repealed their CON requirements, reports showed.
An analysis of state laws in a recently updated working paper by group of economists from the University of Cincinnati, Auburn University and Southern Illinois University found that mortality rates are higher in states with CON laws. They also said states with high “health care utilization” because of COVID-19 that reformed their CON laws during the pandemic had lower COVID-19 death rates and few deaths from other chronic illnesses.