Times-Dispatch Editors Call for COPN Reform

Tomorrow, the House Committee on Health, Welfare, and Institutions will take up the three bill aimed at scaling back Certificate of Public Need (COPN) restrictions on health care, presented by Delegates O’Bannon, Peace, and Byron, respectively. The editors of the Richmond Times-Dispatch erroneously stated in their editorial on the subject that the vote was yesterday. That said, the date problem was just about the only thing the editors messed up.

The RTD took aim at the policy rationale behind COPN (Mercatus link in original):

The COPN system requires hospitals, ambulatory-care centers, and other health-care providers to get permission from the state before making major new investments — i.e., before spending their own money. The lengthy and expensive process can take months and cost hundreds of thousands of dollars, and has been used to stop innovative new treatments that have proven successful elsewhere.

Hospitals not only use the system to throttle upstart competitors, they also wield it against one another — as when HCA tried to stop Bon Secours from building the St. Francis medical center in Chesterfield. The system is a gold mine for lawyers, who rack up huge fees trying to convince the state either to approve or reject projects — projects that often do little but follow customers by moving beds across town.

COPN has no benefit to consumers, though. By restricting supply, it forces patients to drive sometimes long distances to get services they should be able to get closer to home. Research has shown that COPN laws reduce the number and availability of services and hospital beds. With so many members of the baby boom generation reaching retirement age, Virginia should be trying to increase the supply of medical services, not restrict it.

The system has few defenders now except for large hospital chains that use the law to throttle competition (which they call “cherry-picking”) and their occasional allies. Those allies labor under the delusion that market incumbents run their businesses for purely virtuous motives while would-be competitors are driven strictly by greed and are unburdened by any scruple. The evidence for that assumption is, to put it kindly, elusive.

Perhaps if the Times-Dispatch editors had a sit down with their counterparts at the Virginian-Pilot, they could set the Hampton Roads paper straight. But I digress…

More to the point, the RTD folks appreciate the problem in health care supply – which usually gets short shrift from policy makers and pundits, who usually obsess about health care demand like drunken Keynesians. I’ve had quite a bit to say about the COPN effect on health care supply (with an assist from Norm Leahy), and how it leads to higher prices, higher insurance rates, and less health care availability for all. I’m glad to find more who agree.

As for the bills themselves – which “have been written precisely to meet the objections of the hospital lobby,” as the editors note – they come up for a committee vote tomorrow (again, not yesterday).

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