(The Center Square) – Virginia regulations blocked about $74 million worth of health care investments between January 2018 and March 2021, according to a report published by Americans for Prosperity this month.
If health care operators want to expand existing operations or offer new services, state law requires them to apply for a Certificate of Public Need and the government must agree such investments are needed. More than two-thirds of states have similar laws. Supporters argue the restrictions keep prices lower by preventing unnecessary spending, but opponents argue they limit options for patients and keep prices higher because of a lack of competition.
The report referenced a Mercatus Center Study, which estimated that if Virginia did not have these regulations, the state would currently have 49 more hospitals and more facilities that offer medical imaging services, including in rural areas. According to the study, Virginians would also have better quality care and better patient outcomes.
“Certificate of public need laws have become a major barrier to health care in Virginia, especially in rural areas of our state,” Virginia AFP Director JC Hernandez said in a statement. “This top-down approach to health care means fewer hospital beds and higher costs, putting patient’s care at risk. In the wake of COVID-19, Virginia temporarily suspended burdensome COPN laws to deliver lifesaving care. AFP-VA remains committed to permanently repealing COPN laws to help address Virginian’s critical health care needs.”
The state health commissioner ultimately decides whether a Certificate of Public Need is granted based on recommendations from the regional health planning agency and the Department of COPN. Because the application process will cost time and money, the report noted that lost investments are likely much higher than $74 million because providers won’t apply for certificates they expect to be denied.
According to the report, the restrictions turn normal business activity into quasi-political campaigns, requiring providers to launch advocacy campaigns, get letters of support from the medical community and receive signatures through online petitions. This also causes providers to compete with each other for government approval, rather than competing through the market.
On average, the approval process takes nearly six months to complete and sometimes takes longer, which also causes delays in providers offering the services.