Amid a Campaign With Little Talk of Health Policy, CON Laws Get a Moment in the Presidential Spotlight

Former UN Ambassador Nikki Haley has repeatedly taken aim at anti-competitive healthcare regulations.

With the 2024 Republican presidential campaign being dominated by indictments, wars and inflation, healthcare issues have been relegated to the back seat of policy discussions. Most candidates’ stump speeches have been practically devoid of any mention of healthcare. But a few candidates have outlined specific healthcare policy goals. And one idea keeps coming up: repealing certificate-of-need (CON) laws, which require healthcare providers to obtain approval from a government board before expanding services in an area. Currently, 35 states have these laws on the books.

Former UN Ambassador Nikki Haley cited CON law repeal as one of her healthcare priorities in a debate last year, and she did so again in last week’s Iowa debate against Florida Governor Ron DeSantis:

“And then we're going to go and eliminate Certificate of Need in this country. I did that in South Carolina, as well. That basically says if you have a hospital here, you can't have another hospital for X number of miles. They do the same thing for surgical centers, for nursing homes. We're going to put competition back in health care so that health care is fighting for the patient. That way, services go up and costs go down.”

It may be the first time a prominent, major-party presidential contender has taken such direct — and forceful — aim at CON laws. And about time, too.

Although the president has limited ability to influence state CON laws, the fact that the issue is being raised in national debates shows how important it is for states to address bad policies lingering in most of the country.

It’s now clear that CON laws’ stated purpose — to contain costs in the healthcare sector by limiting the duplication of resources — is merely a smokescreen to secure political support for regulations that allow established providers to exclude potential rivals.

Maureen Ohlhausen, a former commissioner of the US Federal Trade Commission, has stated bluntly that CON laws “serve primarily, if not solely, to assist incumbents in fending off competition from new entrants.” Predictably, less competition yields higher prices and worse quality of care.

A substantial body of research documents the harmful impacts of CON laws. Last year, the Institute for Justice reviewed more than 120 academic papers on CON laws, spanning nearly five decades. Its analysis found that 89% of results in these studies showed that CON laws have negative or neutral effects, and that negative effects were five times more common than positive effects. “Many of these studies show that CON laws are bad for patients, bad for payors [sic], bad for improving access to care (including rural care), bad for vulnerable populations, bad for mortality rates for common conditions, and bad for healthcare innovation,” the authors wrote.

Moreover, reforming CON regulations has proven politically feasible — and not just in Republican strongholds like Haley’s South Carolina, where the current governor, Henry McMaster, signed legislation last year virtually eliminating CON restrictions in his state. Since 2016, CON laws have been lifted or pared back in Connecticut, West Virginia, Montana, North Carolina, Tennessee, and New Hampshire.

Now, as the Republican primary process shifts its focus to New Hampshire and South Carolina, candidates have a chance to highlight the benefits of CON law repeal in two states that have embraced reform — and been better off for it.