Senate finances this week will occupy SC 26repealing the state certificate of need program for health care facilities.
The sponsor, Senator David Wilson of Wasilla, introduced the bill in January 2021, and it was referred to an additional committee by Senate President Peter Micciche in February 2022.
Certificate of Need is a program that gives the state ultimate control over the health facilities that can be built. If a clinic wants to add an extra exam room or X-ray machine, for example, they must first obtain permission from the State of Alaska and receive a certificate that limits what can be built or bought.
The state maintains that he needs authority on building health care, “because of the large amount of money the state spends on Medicaid.” Additionally, the state states that “population projections suggest that Alaska’s health care services will expand to meet the needs of a growing population, including a much larger elderly population. Therefore, circumstances require that new and expanded services be properly planned to obtain the highest quality and most appropriate services possible at the best price.
But the Certificate of Need program is anti-competitive; Senator Wilson’s bill provides for a three-year phase-out period before the repeal becomes effective.
Certificate of Need programs were mandated by the federal government in 1974. Due to their anti-competitive nature and rising health care costs, Congress repealed the mandate in 1987. Since then, 12 states have fully repealed their CON laws, and 35 states continue to operate some version of a CON program. Three states do not have such a law.
States without a full CON program include Arizona, California, Colorado, Idaho, Kansas, Minnesota, New Hampshire, New Mexico, North Dakota, Pennsylvania, South Dakota, Texas, Utah, Wisconsin and Wyoming. Florida only maintains a CON program for children’s hospitals and hospices.
“Four decades of data and studies show that CON laws have not controlled costs, improved quality and outcomes, or increased access to health care for the poor or underserved. CON laws established health care monopolies, which resulted in barriers to new or expanded medical facilities and limited health care choices for consumers,” Senator Wilson wrote. “Repealing our certificate of need program would benefit Alaskans by promoting free competition in health care markets.”
Americans for Prosperity Alaska has made the repeal of the Certificate of Need its top legislative priority. Bernadette Wilson, state director for AFP-Alaska, told the Must read Alaska show that she will travel to Juneau for the Senate Finance Committee hearing this week. AFP sent a letter to the Senate Finance asking for time on the agenda.
“After instituting this requirement, the federal government found that the CON laws did not achieve the desired effect of reducing health care costs, but instead had other detrimental effects on the American health care system. . As a result, the federal government quickly removed this requirement and has always recommended that states end their CON programs,” Bernadette Wilson wrote to the committee.
“In fact, the Federal Trade Commission (in the Trump, Obama, and Bush administrations) has urged states to end CON laws, citing the fact that they are anti-competitive and provide no meaningful benefit or protection to consumers of This includes a letter sent by the FTC to the Alaska Senate in 2019 regarding the same legislative language contained in SB 26,” she wrote.
Wilson said Alaska would have 11 additional hospitals, including 8 additional rural hospitals, without CON restrictions. “This extra capacity would have been a big help throughout the COVID-19 pandemic, which saw hospitals over capacity and unable to provide a full range of medical procedures to patients.”
The bill enjoys bipartisan support, but faces opposition from the powerful hospital lobby.