‘Why We Can’t Have Nice Things’: Permission Slips for Innovation

Dr. Jay Singleton remembers the moment when he realized that Certificate of Need laws were serious business.

“He stood up and stared at me and hit his hands on the table,” Singleton recalls. “And he said, ‘well, we’re going to fight you on this.'”

As we explained in last week’s episode of Why We Can’t Have Nice Things, Singleton has been trying to open a new cataract surgical center in New Bern, North Carolina. He’d met with the CEO of the local hospital as a friendly gesture. What he got was the promise of a protracted legal fight.

Earlier this year, Singleton’s case made it to the North Carolina Supreme Court—though he is still likely a long way away from having a final resolution. Meanwhile, his patients continue to face higher costs: Singleton says that a surgery that would cost $1,800 at his clinic instead costs about $6,000 at the hospital up the road. 

Joshua Windham, the Institute for Justice attorney who is litigating Singleton’s case, says the problem lies with North Carolina’s Certificate of Need (CON) law, which gives government regulators—rather than patients or consumers—the power to decide what services are needed.

“They’re really permission slip requirements for innovators,” says Windham. “The government can’t possibly know these things in advance, in part because people’s perceptions of their own needs will change, but also because the facts of reality will change.”

In some places, those roadblocks to innovation in health care are starting to fall. Also on this week’s episode, we’ll follow up on Katie Chubb’s efforts to open a new birth center in Georgia—something she’ll now be able to do after the state legislature passed and Gov. Brian Kemp signed a major CON reform earlier this year.

“It’s definitely propelled me forward and made me realize that even the smallest person in somewhere remote as Augusta can start some changes,” says Chubb.

Further reading for this week’s episode:

“New Georgia Law Allows Birthing Centers To Open Without Needing Permission From Nearby Hospitals,” by Eric Boehm, Reason 

“North Carolinians Are Being Conned by Certificate of Need Laws,” by Christina Smith, Citizens Against Government Waste

“The Powerful Council Overseeing North Carolina’s Health Care,” by Jeanette Doran, Carolina Journal

“Kemp Signs Major Reforms to CON Law,” by Dave Williams, Capital Beat News Service

“The Con of Certificate of Need Laws,” by Veronique de Rugy, Mercatus Center

Written by Eric Boehm; produced and edited by Hunt Beaty; fact-checking by Anthony Wallace.