Connecticut is one of 20 states that suspended some or all certificate of need (CON) laws during the height of the COVID-19 pandemic to help the medical industry respond more efficiently and effectively to the needs of patients.  The temporary suspension of these outdated laws has led to their repeal in several states, but other states like Connecticut have moved in the opposite direction.  Connecticut’s H.B. 5449 will impose steep fees for healthcare facilities under the CON regime.

The first CON laws were enacted in 1973 and were originally intended to control healthcare costs by limiting oversupply and development in the medical marketplace.  But states that enforce CON laws require a lengthy and pricy application to develop or expand healthcare facilities, resulting in fewer new facilities and higher costs.

Today, these laws limit access and supply to quality care by keeping new facilities from being built or restricting the redevelopment or expansion of existing facilities.  In addition, CON laws breed cronyism and allow established industry leaders to cut out the competition, which will be the result of H.B. 5449.  The bill increases the state’s CON application fee by a shocking 4,900 percent, from $500 to $25,000.  This non-refundable application fee will stifle innovation and future development in the healthcare marketplace, and act as a significant barrier to entry for smaller companies and less established startups.

CON laws have fallen far from their original intent to control healthcare costs.  A Kaiser Family Foundation study found that healthcare costs in states with CON laws are 11 percent higher than those without CON laws.  Connecticut healthcare costs could drop by $283 per person if its CON laws were repealed rather than expanded.

Access to better facilities and technologies would also be improved if CON laws were repealed in Connecticut.  States with four or more CON restrictions, of which there are 35 including Connecticut, have significantly lower-quality hospitals than non-CON states.  A Mercatus Center report found that CON states have a 5.5 percent higher mortality rate than those without such laws.  Connecticut would have 5.3 percent fewer deaths from post-surgery complications if the CON laws were repealed. 

H.B. 5449 will raise costs and limit access to quality healthcare for patients.  Record high levels of inflation are crushing businesses and felt by consumers and any effort to increase heavy- handed government fines, fees, and regulations will have devastating effects.  The Constitution state should instead focus on patient-centered care and unleash the free market to lower prices and increase access to high quality care.  Competition spurs innovation, not government regulations.