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Mercatus Center Study: States With COPN Laws Have Higher Death Rates

George Mason University’s Mercatus Center – the folks who examined the effect of Certificate of Public Need (COPN) laws and found that states with COPN laws have fewer hospital beds [1] – has done a deeper dive and discovered that states with COPN laws also have higher death rates.

From the MC Summary [2]:

CON Laws Do Not Raise the Quality of Care
There is no evidence that the quality of care at hospitals in states with CON regulations is better than the quality of care in non-CON states.

CON Laws Lower the Quality of Medical Services
Hospitals in CON states perform worse than those in non-CON states on eight of the nine indicators in the study. For four of these indicators, the difference in performance is statistically significant. The only indicator for which CON states did better than non-CON states is postsurgery development of pulmonary embolism, by about four cases per 1,000 patient discharges.

CON Laws Are Associated with Higher Death Rates
The average 30-day mortality rate for patients with pneumonia, heart failure, and heart attack who were discharged from hospitals in CON states was 2.5–5 percent higher than that of their non-CON-state counterparts. The largest difference is in deaths following a serious postsurgery complication, with an average of six more deaths per 1,000 patient discharges in CON states.

Age, Income, Education, and Ethnicity Do Not Change the Results
The study focuses on specific Hospital Referral Regions where the demographic factors of age, income, education, and ethnicity are not systematically different on the CON versus the non-CON side of the border. Therefore, the difference in hospital quality between CON and non-CON states cannot be explained by demographic variations.

To be fair, the last paragraph is not the only way to account for other factors. Still, they did have about 900 hospitals in the survey.

Last year, the Virginia House of Delegates headed the calls of yours truly [3], Norm Leahy [4], the Times-Dispatch [5], and Delegate Chris Peace [6]; they passed a loosening of COPN laws that was promptly shelved by the State Senate.

The Times-Dispatch editors took up the call again [7] two weeks ago (while everyone else was fixated on the presidential race.

Defenders of the system claim it helps hold down costs. But as the Department of Justice and the Federal Trade Commission have long pointed out, it doesn’t. Now comes another study, this one from the Mercatus Center at George Mason University. It finds that COPN laws also do not improve hospital quality. In fact, they make it worse: More patients die within 30 days of discharge from the hospital, or have serious post-surgery complications, in states with COPN laws than in states without them — even after adjusting for age, income, and ethnicity.

Nobody should pretend that repealing COPN would turn Virginia’s health-care system into Shangri-La. It would qualify as a modest fix that would produce marginal improvements. Most people might never even notice. But for the ailing individuals on the margin who would be affected by the improvements, the difference could be one of life and death.

The DOJ/FTC report (from 2015, sent to Delegate Kathy Byron) can be found here [8], but here’s the key quote (CON is short for Certificate of Need, and the usual initiation for what we call COPN here).

…CON laws raise considerable competitive concerns and generally do not appear to achieve their intended benefits for health care consumers. For these reasons, the Agencies historically have suggested that states consider repeal or retrenchment of their CON laws.

That’s right, folks. We’re talking about regulations that even the Obama Administration considers to be ripe for repeal or reduction.

We’ll see if this issue returns to the fore in 2017.