Virginia House Republicans propose COPN reform

Roughly thirteen months ago, Norm Leahy introduced BD readers to the health-care-market-distorting “Certificate of Public Need” Laws, which essentially force anyone looking to set up shop as a medical business to beg Richmond for approval. The notion that appointed bureaucrats in Richmond know better than the free market whether or not a health care firm is economically viable is a perfect combination of government arrogance and market manipulation, as the COPN regime has become a legally mandated barrier to entry that enriches existing hospitals and health care providers in the Commonwealth.

From Norm’s post

The Mercatus Center at George Mason University recently published a study that found CON laws “limit the supply of medical services” and can, in some cases, do harm to the quality of care.

So why do such regulation endure? It’s a classic case of rent seeking.

Virginia is better than this (or aspires to be). In the struggle over Medicaid expansion, large hospitals banded together and warned that without more Medicaid dollars, they might be forced to close up shop. The reality is that with CON laws on the books, they have a significant financial and regulation hedge that will keep their doors open. And you are paying for it.

If politicians are looking for candidates for health care reform, they should begin here.

I, too, have sounded the alarm over the COPN nonsense. Well, it turns out someone in Richmond was listening to us after all.

From the VA House Republican Campaign Committee

Three Republican members of the Virginia House of Delegates are introducing legislation in the 2016 General Assembly session to reform Virginia’s Certificate of Public Need (COPN) laws. Delegates John O’Bannon (R-Henrico), Kathy Byron (R-Bedford) and Christopher Peace (R-Hanover) are proposing eight legislative ideas to repeal or reform COPN, create a more free-market healthcare system, improve access for patients, and control costs.

“As a physician, I see firsthand the negative effects that burdensome COPN regulations are having on healthcare in Virginia,” said Delegate John O’Bannon (R-Henrico). “COPN laws limit competition, which means fewer choices and higher costs for Virginia families. Reforming COPN is the best way to improve access for patients, expand healthcare services and keep costs under control. I look forward to working with my colleagues this coming session to enact meaningful reform.”

All three Republican Delegates have sponsored bills to scale back COPN’s anti-competitive reach. O’Bannon (the physician) would phase out much of COPN law over three years (nursing homes, open-heart surgery facilities, and tissue transplant services would be unaffected). Delegate Peace’s set of bills would do the same, but adds “strong charity care requirements to ensure the most vulnerable have access to vital healthcare services.” Delegate Byron’s efforts would also end COPN for all except rural hospitals and nursing homes.

There is far more alike in the Delegates’ bills than not, and one could see them rolled into one bill. Frankly, what’s more important is the imprimatur of the VA HRCC. That makes it clear COPN reform will be a priority for the House majority in 2016.

The Democrats, from Governor T-Mac on down, have repeatedly insisted that the best way to increase access to health care is with Medicaid expansion, never mind Medicaid’s established history as a single payer cul-de-sac whose clients have a terrible time just trying to find a doctor. Just last week, the Governor revealed to all that he still clings bitterly to the same demand-driven backwardness that has so skewed the higher education market (Foundation for Economic Education).

With these proposals, the House Republicans are showing an economic understanding that continues to elude (for now) the Democrats. The best way to increase access to health care is to increase the amount of health care available. For the Commonwealth, that means getting the government out of the way. The COPN reforms proposed by Delegates Byron, O’Bannon, and Peace do just that. As 2016 dawns on Virginia, its capital, and its legislature, we hope that the Democrats in the General Assembly and the executive branch can see the light and embrace this supply-side health care reform.

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