COPN: The Big Health Care Reform Issue That’s Still Out There

While the rest of the nation awaits the changing of the guard in the House of Representatives, Virginians’ attention will, at least in part, be diverted to the 2019 state legislative session and to the subsequent election in November.

Already, there are whispers of nomination challenges for Republicans who supported Medicaid expansion. This post, however, is about the other side of the health care market: the supply side, which is still heavily restricted by the Certificate of Public Need regime.

COPN effectively forces any would-be health care provider to get state permission to set up shop, and in a system where incumbent providers can lobby the state to shut newcomers out. In every other industry, an existing company blocking new firms entering the market would be heavily discouraged, if not outright illegal. In Virginia health care, it’s been state policy for over 40 years.

It should surprise no one that health care rationing from Richmond has all sorts of problems. In fact, this set of market restrictions is so out-of-whack, corporatist, and detrimental to health care that even the Obama Administration called for it to be scaled back or scrapped. That’s right, folks, the last Democratic Administration insisted this was a mistake. Yet, somehow, the Republican-controlled General Assembly never gets with the program.

Only now, the urgency is greater. Medicaid expansion will do much to increase the demand for health care provision. Indeed, that was the entire point behind the expansion: to ensure folks who needed health care would be in a position to afford it. However, that’s hardly a guarantee that they will actually get it. Part of that comes from how Medicaid compensates providers (or, to be more precise, how it really doesn’t compensate them), but there is also the matter of how quickly health care providers and respond to the increase in demand.

Naturally, that will be a lot more slowly is incumbent providers can block any new entrants.

As an aside, restricted supply will also mean higher prices – and a greater discrepancy between Medicaid rates and everyone else’s. So those who insist that Medicaid’s rates can be feasible should prefer greater competition among providers, the very thing COPN restricts.

I mentioned that one because up to this point, the average Republican Senator and Delegate has been friendlier to COPN reform than their Democratic counterparts. I’m hoping to make the latter more receptive to the idea (the Obama Administration endorse should help, I hope).

More to the point, Republicans and Democrats in Richmond can make Virginia more prepared for the newly insured by allowing for more providers to respond to the demand. That begins with reforming COPN.