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Advocates of certificates of need say competition isn't needed to drive down state's healthc

The Mississippi Legislature held a hearing Monday about the state's certificate of need program that regulates the building of hospitals and 17 other healthcare facilities in the state. Photo by Steve Wilson

According to advocates of a regulatory regime that critics charge amounts to a monopoly, competition isn't required to bring down prices or provide higher quality healthcare.

The Mississippi Legislature is investigating whether to further change or even repeal the state’s certificate of need program for medical facilities.

To build a hospital, a multi-specialty ambulatory surgery center or any of 16 other types of medical facilities, an operator must receive a Certificate of Need from the state’s Health Board after showing regulators that the facility is justified and needed.

Opponents of this regulatory regime say this hamstrings competition and leads to lower quality care and encourages monopolies.

State Rep. Robert Foster (R-Hernando) called the CON regime “a certificate of monopoly” and told the Mississippi Independent that a hearing last Monday was important to educate state residents on whether the policy is beneficial to their healthcare.

Matthew Mitchell, an economist with the free market-based Mercatus Institute at George Mason University, told legislators that research has consistently shown that states without certificate of need regulations have better healthcare outcomes, more facilities and lower costs. Mitchell also characterized Mississippi’s CON regime as being more restrictive than other states.

Russ Latino, the state director for the pro-free market Americans for Prosperity, told the committee the CON regime should be repealed. He said that would allow “market driven forces" to make the determination on how many healthcare facilities the state needed.

He also said that introducing competition would help cut costs and provide more choices for consumers.

The other side, represented by two industry groups and the Hattiesburg Clinic, argued that free-market forces would actually be a hinderance to driving down healthcare costs and that the regulation regime needed to be continued. Their arguments were framed from a perspective that most of their patients were on either Medicaid or Medicare and, since those reimbursement costs are fixed, competition would do nothing to decrease them.

Tim Moore, the executive director of the Mississippi Hospital Association, told the committee that competition was not needed in the healthcare industry to reduce costs.

According to counsel for the professional association of the state's nursing homes, competition would likely increase the cost of Medicaid.

John Maxey, the attorney for the Mississippi Healthcare Association, said "absent regulation, economic Darwinism would release a torrent of free market forces risking the equilibrium of supply and demand."

This fiscal year, the Legislature appropriated nearly a $1 billion for Medicaid, a slight reduction over last year's measure.

The Mississippi Legislature last modified the program in the 2016 legislative session, placing tighter deadlines on the state Board of Health for conducting hearings for Certificate of Need-related matters to expedite decisions.

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