Cancer patients soon will have new treatment options in Connecticut. Health care providers recently received regulatory approval for a joint venture that will allow them to open the state’s first proton therapy center.
The lifesaving technology, which uses laser beams as a safer and more effective alternative to chemotherapy, is urgently needed. So the announcement was a big deal. But what the partners failed to mention in their news release is that a competitor could beat them to market with a similar facility 45 miles away—except the state is running interference.
The rival project already has the necessary medical expertise, financing, zoning permits, and community support lined up. The only thing missing is a “certificate of need” (CON), a government permission slip to launch, expand or terminate any health care venture in the state.
The rival project, led by a group of independent doctors and investors, has tried to get a CON for two years. But the oversight agency with veto power recently issued a preliminary denial. Two weeks later, the same agency approved the joint venture.
The protectionism was not lost on the losing side, which has warned about higher health care costs due to a potential monopoly. An appeal is pending, but if the state sticks with its preliminary decision, Connecticut cancer patients will find themselves with less choice and less access to proton therapy.
The case shows a clear example of the government picking winners and losers. Two applicants submitted viable proposals. But rather than letting them compete on a level playing field—or coexist in separate cities—state regulators tipped the scales in favor of only one bid.
To make matters worse, Connecticut allowed the winning side to testify against its potential rival at a CON hearing, despite a clear conflict of interest. Something similar would happen if Connecticut allowed The Home Depot to participate in decisions about new hardware stores—or if the state allowed McDonald’s to say who could sell burgers.
Our public interest law firm, the Institute for Justice, has no connection to either proton therapy project, but supports the rights of all health care providers to invest their own money without unreasonable or excessive government interference.
Unfortunately, the Connecticut case is not unusual. “Conning the Competition,” a nationwide analysis of state laws from the Institute for Justice, identifies 38 states—plus Washington, D.C.—with some form of CON legislation. Overall, 34 of these jurisdictions allow competitors to intervene in the application process and object to applications that could reduce their revenue.
CON laws purport to lower health care costs, increase patient access and ensure quality by managing the distribution of private resources, but none of these gains has materialized. A joint report from two federal agencies—the Federal Trade Commission and the Antitrust Division of the Justice Department—finds no evidence that CON laws achieve any public benefit.
A supermajority of studies agrees. More importantly, decades of real-world experience show that CON laws do not work as advertised. Recognizing the policy error, Congress reversed itself in 1986 and repealed CON mandates it had imposed just 12 years earlier.
Since then, California, Texas, and 10 other states, which contain nearly 40 percent of the U.S. population, have canceled their CON laws entirely. Most recently, New Hampshire joined the list in 2016. Each time, the American Hospital Association and local affiliates predicted disaster, but negative effects never materialized.
The opposite happened instead. At the start of the COVID-19 pandemic, states without CON laws had more hospitals and surgery centers per capita, along with more hospital beds, dialysis clinics, and hospice care facilities.
Recognizing its disadvantage, Connecticut scrambled to suspend CON requirements for mental health care facilities through June 2026 in response to a bed shortage. The legislation, which Gov. Ned Lamont signed on May 23, 2022, represents a step in the right direction. But additional psychiatric hospitals already could be open without CON constraints.
Proton therapy also could be available today if providers did not have to spend years begging for permission to serve patients. Lifesaving technology should not have to wait. Rather than playing favorites, states should repeal their CON laws and let doctors work.
Image credit: Shutterstock.com