Thursday, December 10, 2020

Little David Takes on Goliath Over Certificate of Need Laws

 The Mississippi Justice Institute issued the following statement.

Charles “Butch” Slaughter is a physical therapist and owner of a clinic in Jackson, Mississippi, who would like to start a home health business to reach new patients who want or need to receive house calls. But Slaughter can’t offer this service because of a nearly 40-year-old law that makes it illegal to start new home health agencies in the state. Even if this ban didn’t exist, he still might not be able to provide in-home services, since his competitors could use Mississippi’s Certificate of Needs laws to force him to battle them in court over whether the community really needs a new home health agency.
 
Today, the Mississippi Justice Institute (“MJI”), a non-profit constitutional litigation center and the legal arm of the Mississippi Center for Public Policy, has filed a federal lawsuit over these unconstitutional laws on behalf of Slaughter.
 
”The ban on new home health agencies is an absurd law that serves absolutely no purpose other than preventing legitimate competition and creating an oligopoly for existing providers,” said MJI Director Aaron Rice. “The CON laws are just as bad, and essentially serve as a competitor’s veto for powerful industry insiders.” 
 
“Patients have been increasingly seeking in-home physical therapy during the COVID-19 pandemic,” said Slaughter. “I can’t believe it is illegal for me to start a home health business to help more patients. Other companies are already doing this, but it’s illegal for anyone else to do it. It makes no sense.” 
 
Mississippi’s law requires many healthcare providers to apply for and receive a certificate of need from the Department of Health before opening, expanding, relocating, changing ownership, or acquiring major medical equipment. This a difficult and expensive process, during which existing competitors can protest that there is no “need” for a new healthcare facility. Getting this certificate has nothing to do with proving that the new facility will be safe, sanitary, or high quality. Rather, applicants must convince the government that opening a new health care facility will not financially hurt competing health care businesses.
 
Additionally, in 1981, Mississippi enacted a ban on the issuance of new certificates of need for home health agencies. This means that for almost four decades, the only way to enter the home health market has been to purchase a previously issued certificate of need from the owner of an existing home health agency who is seeking to sell the agency along with its certificate of need. If there are no previously issued certificates of need for sale in the desired service area, then healthcare entrepreneurs simply cannot provide home health services.
 
CON laws are a failed public policy that was originally intended to drive down health care costs. After experience showed that they actually had the opposite effect, some states abandoned them. But they remain on the books in 35 states, including Mississippi, because existing providers who benefit from them lobby furiously to keep them in place. Currently, Mississippi is one of only 16 states that require a CON to open a home health agency, and one of only two states that has a complete ban on new home health agencies.
 
Numerous studies have shown that CON laws do not live up to their original goals, but instead decrease access to healthcare, increase costs for consumers, and limit competition. In 2016, the Federal Trade Commission and the United States Department of Justice issued a joint statement, concluding, “CON laws, when first enacted, had the laudable goals of reducing healthcare costs and improving access to care. However, after considerable experience, it is now apparent that CON laws can prevent the efficient functioning of healthcare markets in several ways that may undermine those goals. First, CON laws create barriers to entry and expansion, limit consumer choice, and stifle innovation. Second, incumbent firms seeking to thwart or delay entry or expansion by new or existing competitors may use CON laws to achieve that end. Third, CON laws can deny consumers the benefit of an effective remedy following the consummation of an anticompetitive merger. Finally, the evidence to date does not suggest that CON laws have generally succeeded in controlling costs or improving quality.”
 
“The government cannot pass laws merely to protect businesses from legitimate competition,” said MJI volunteer attorney Seth Robbins. “Healthcare costs are out of control.  We need more competition in the healthcare industry and less government intervention and protectionism. We’re proud to stand with Mr. Slaughter in his fight against these senseless government policies.”
 
“Mississippi should be encouraging entrepreneurs, not outlawing them,” said Rice. “We look forward to vindicating Mr. Slaughter’s constitutional right to earn a living, and seeing him get back to growing his business”
 
The lawsuit was filed in the U.S. District Court of the Southern District of Mississippi. 

Kingfish note: Reason #___ why Mississippi has some of the worst health care in the country.   

 Only a lawsuit will have a chance of changing the CON laws.  There is literally no political will to change the Mississippi and the opposition is too strong.  Tate, Hilbert, and Gutless Gunn as well as a  plethora of committee chairmen are in the pockets of MHA and MSMA.  Even during a pandemic when our ICUs and hospitals are maxxed out, there is no serious mention by anyone of relaxing the Certificate of Need laws.  Indeed, Dr. Dobbs told this correspondent this week that changing the CON laws would only increase health disparities, thus hurting the poor. 

 

33 comments:

Anonymous said...

The law is doing what it is designed to do, enrich one to deny another.

Anonymous said...

Picking losers and winners (good ol' boys). Good for him for bringing this suit, as this seems to be a very unconstitutional law. Let the market determine the need.

Anonymous said...

The CON law is the absolute height of stupidity.

Anonymous said...

Yep.

I wish I'd had a CON to protect by retail/service business for the last 3-4 decades.

Anonymous said...

At least I learned a new word. Oligopoly.

All this archaic law does is protect the monstrous Jackson enterprises that are Baptist and St. D.

Burke said...

Mississippi politicians never fail to attack "excessive regulation." They almost universally support "free markets."
Then they get to the Capitol and the money doesn't talk, it swears. In this case, some folks are stepping up to bypass the venal legislators and take it to the Judiciary. Given the brain power and legal chops of Aaron Rice alone, we ought to get a sensible outcome.

Anonymous said...

Kf, you're an idiot to try to connect the CON to COVID ICU beds and hospital rooms.

We've been through this before and you conceded tgat you were wrong. But yet you come back again with the silly claim.

You don't build anything - hospital beds, ICU beds, airport runways, interstate highways, anything for a once in a century event.

Since you think you are so smart, tell us what tge cost would be to maintain all these ICU beds you think are being held back by the CON. And don't forget the cost to maintain Nd staff them.

Once you give us that number - an estimate will be fine - tell us how those hospital are going to pay for them during non-pandemic times. (Fixed cost accounting will tell you , the cost of the used hospital services will increase.

Whether the current CON is good or not can be the subject of a good debate. And there are good arguments on both sides.

But to use COVID as your stalking horse is idiocy at its best.

Anonymous said...

There's a market for everything.

The home health care "industry " included.
Whomever provides the best service at the best price will win.

This is no different than any other home delivery enterprise.

"Certificate of Need" to stop by a homebound patient's house twice a week ????

That's not even in the same universe as building a new hospital.

Anonymous said...

Mississippi Republicans like neither competition, freedom, nor the private sector. In many ways, they are oligarchs. Competition would be superb and would be present if we lifted CON laws....like the Communist State of California did long ago. Freedom would be great (like marijuana) as they have in the....Communist State of California. Wine stores lower prices as they do in....the Communist State of California. But here the Republicans like harsh state control of alcohol; harsh penalties for marijuana; and CON laws.

The Republican Party in Mississippi should be overthrown by freedom loving people.

Anonymous said...

Please please please queenguppie and all you health experts do opine some more!

We need more totally uneducated opinions!

Jesus please more uninformed thoughts!

Anonymous said...

After the legislature got their ass handed to them by the voters compliments of Rep Bomgar, they might actually start paying attention to what real conservatives are clamoring for. Kill the CON laws. And privatize wine and liquor sales. (Ask any restaurant owner how bad ABC is performing). And fix the damn roads. Looking forward to more ballot box initiatives. State officials and their lobbyists be damned.

Anonymous said...

Wonder how much the Hospital Association contributes to our state elected officials every four years? And why? Haha.

Anonymous said...

2:59, good debate? CON is only good for lining incumbent hospitals pockets. And incumbent legislators coffers. Been a dirty deal for a century.

Anonymous said...

6:33 - you can find out easily - go to the MS Secretary of State website. Not a tough thing to do for yourself.

But you are going to be shocked. They weren't contributing to Tate Reeves, but rather Jim Hood. And also with the other quasi-Democrat, Bill Waller. Same was true in previous years; they have been hard into the side of the Dems.

Now what you gotta say

Anonymous said...

I wonder if the lady who lives in Frank Melton’s old house has anything to do with this? They are the largest around when people want to Sta Home.

Anonymous said...

The Hospital goes as far as to employ the Chairman of Health in House. Mimms... oh you guess he does Business Development( that is insider trader) conflict conflict...

Anonymous said...

CON is just that

Anonymous said...

7:07, I looked. There are no clean hands. Just some dirtier than others. So who is going to speak out against CON? No incumbent that’s for sure.

Unknown said...

I seem to remember an expose on CONs quite a few years ago, and the writers pointed out that the legislature had to approve a CON, and interestingly enough, several of the legislatures ended up with an interest in the business after the CON was approved.

Anonymous said...

Several states have laws similar to Mississippi's CON. Sorry, KF, it's not a reason why health care here is below average. The reason for our low level of care is we are in Mississippi - a poor state with bad health habits and a government that is determined to force poor people to better themselves by denying them as much help as they can.

The CON is designed to keep Baptist Hospital on State Street and St. Dominic on Lakeland Drive. Neither facility wants to be there any more - they want to move north to the 463 area of Madison County where a lot of them live and where they think they won't have to deal with poor patients as much. This would have a devastating effect on Jackson, but, so what - go to UMMC. The Clarion Ledger (back when they had reporters) did several good articles in the '90's on how both Baptist and Saint D had bought a lot of land in Madison at 463 between I-55 and the Parkway and were trying to get around the CON to move beds there. It's not a good look for either hospital, so they re-grouped. Baptist has put it's exercise center there and St. D has some private clinics but they have also stayed on their main campuses and invested there.

One way around the CON would be to get people to actually move here. The "need" in Certificate of Need is based on whether you need additional hospital beds based, in part, on how many people are here. If we had 1.5 million people we would have more hospital beds. But, we have the same .5 million that we have had for the past 30 years.

Or, another idea might be for Baptist and St. D to announce they don't need tax exemptions any more, start paying a lot more money to the Capitol and then they can do whatever they want. But, as long as the state is invested in their business, the state can have a say in that business.

And don't get me started on the Mississippi Justice Institute....

Anonymous said...

And don't get me started on the Mississippi Justice Institute....

Or else you'll just act authoritative and drop hundreds of additional [anonymous] words?

Anonymous said...

It is rather annoying when I hear my friends in other States ask " why don't you ( use a service that doesn't exist here).

I'm puzzled by the argument that I shouldn't have nice things because not everyone can afford them or I should pay more( in time and money) to support the poor mega medical facilities coming from a Trump supporting administration.

Honest, I'd make a yearly donation larger than what you get in money making me jump through hoops.

Anonymous said...

Nursing homes are where the CONs really create issues for our state. The average occupancy of nursing homes in the state is close to 90% and you can’t find a room in some areas. Obviously our market could support more nursing homes and as our population continues to age it will only get worse. Some believe that the state uses CONs to control its Medicaid expenses (those on Medicaid can’t use what they don’t have access to). Obviously owners in nursing homes would prefer to keep CONs to protect their license to print cash. Hopefully this will get some traction and drive some much needed change.

Anonymous said...

CON law won't matter. Abolish it and you sheeple will all think everything is fine. All the while health care costs will continue to creep up and you won't be able to pinpoint why. But you won't blame the abolishment of the CON law - we have a free market!

Anonymous said...

The monopoly is BCBS.

Pigott is the most powerful person - not woman - person in the State of Mississippi.

Anonymous said...

Nursing homes that even allow Medicaid 'guests' are limited in the number of beds that can be occupied by folks in that class. The state does not want medicaid patients in nursing homes and the CON helps control that.

Anonymous said...

3:10's absolutely right... seen it 1st hand. What I don't understand is that many (most?) of those who enter nursing homes under private pay eventually run out of $$ if they live long enough... and then what? They don't boot em out. Do they 'automatically' become medicaid status automatically with some special provision?

Anonymous said...

7:11 - Absolutely not. The state mandates the passage of five years time once one (or her family) applies to the Medicaid Commission. This ensures that no property or possessions of value have been transferred to others in order to qualify for Medicaid designation. A trust is the only way to keep the state from owning (her) property.

It is an absolute goal of the Medicaid Commission and its black employees to be damned sure (insofar as possible) that no white person with assets EVER gets approved for Medicaid. Walk into the Medicaid office on 55 Frontage and you'll see the goal of this program.

Anonymous said...

I seem to recall that the Methodist Hospital built a nice big hospital just south of the Hilton Hotel on County Line Road, assuming that they would get the necessary CON. But they were denied the CON and eventually gave up.

Am I misremembering that?

Anonymous said...

I don't know who built it, 10:22, but it's a mile or two south of the Hilton and was denied the right to open as a hospital and is now open as a 'specialty hospital'.

Anonymous said...

Those in control want us to consider CON to be part of the Free Market. So what's new?

Anonymous said...

Once upon a time there was a blind state Senator from Vicksburg who controlled all the CONs for nursing homes in Miss. Supposedly he got very wealthy thanks to a gentleman from Louisiana who always was able to get a CON. Is this a fairy tale or true?

Anonymous said...

12:48 your memory is fine. Thank God a man named THAD beat him in the race for the US House. Can you imagine the mess if the state senator had gone to Washington and deprived this state of the leadership of Senator Thad


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