Our CON laws are working, and we need to keep them

For the past few decades, there has been a push at many levels to do away with government regulations on business. This effort has only increased recently.

Along these lines, every year or two, some state politician suggests doing away with Georgia’s Certificate of Need (CON) laws, which regulate where and how health care facilities can operate. Sometimes people in the health care field make similar suggestions.

Unfortunately, while many of these proposals invoke the principle of the free market, they are misguided.
Most of my career was spent in the private sector in for-profit health care corporations. For four years, I was with two major for-profit hospital chains, and I had the responsibility of trying to obtain CON permits for new and existing facilities.

I learned that corporate executives have a legal responsibility to put their firms’ interests first, ahead of societal concerns. There’s nothing wrong with that, since people in a free society have a right to see that their particular interests are represented. But government regulation has a broader aim. It is intended to protect the consumer rather than the corporation.

Here’s an example of what could happen in an unregulated health care environment in Georgia:


Without CON regulation, a nursing home would be free to open near other nursing homes, regardless of true need. As a result, there would be an avalanche of new nursing homes. This would lead to several more unintended consequences.

A. The existing and new nursing homes would have to compete for business, creating artificial demand. Due to aggressive marketing by for-profit national nursing home corporations, many seniors would be enticed to leave their own homes to enter nursing homes — although some of these patients actually would be better off with the available alternatives, such as in-home care.

B. Since the state pays for the majority of nursing home residents through Medicaid, its budget would be blown. This would cause major tax increases and/or cuts in other vital programs, such as transportation infrastructure and education.

I am a fiscal conservative, and I dislike paperwork as much as the next guy. But I know that government regulations are put in place for a reason, to protect the public. At least in the case of Georgia’s CON laws, the current regulations are working well.

Democratic President Bill Clinton and a Republican Congress teamed up to repeal Glass-Steagall, a supposedly obsolete law that prevented financial institutions from running wild. As a direct result of that repeal, we ended up with the Great Recession less than a decade later.

Let’s not make the same “unintended consequences” mistake in regard to CON.

Jack Bernard, the first director of health planning for Georgia, has been a senior executive with several national health care firms. He’s a former chairman of the Jasper County Commission and Republican Party.