To the long list of reasons Virginia should abandon its certificate-of-public-need system, you can now add one more: COPN rules hurt hospital quality.
Like 35 other states, Virginia requires health-care providers to get the state’s permission before they can spend their own money on capital investments such as new buildings and new equipment. Big players — hospital chains especially — routinely try to game the system to thwart competition from one another and from upstart entrepreneurs who bring new ideas and approaches to the delivery of medicine.
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.
Those with a vested interest in the status quo will no doubt complain that Mercatus has a bias toward free-market economics, and that its study is tendentious and politically motivated. Assuming for the sake of argument that this is true, it does not alter the underlying data. More to the point, while critics of COPN take issue with studies showing the system’s shortcomings, they do not point to studies purporting to demonstrate the system’s benefits.
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.