Certificate of Need (CON) repeal is long overdue in Michigan. The legislature has reform bills in the pipeline. Can we make it happen in 2022?

Handicapped, young, and suffering severe back pain, a Michigan girl I know was put onto a 6-week MRI waiting list some years ago.

Six weeks.

We all know someone who has suffered delays in care, especially for mental health. Not just from staffing shortages, these arise from the Michigan Certificate of Need law.

The promise fifty years ago was that CON would efficiently distribute funds and limit costs.

Protectionism. Rationing. Cronyism. Criminalizing care. By any name, Michigan’s barrier to local startups is a sort of CON game.

noun: con; an instance of deceiving or tricking someone. “a con artist;” abbrev. of “confidence”
synonyms: swindle, deception, trick, racket, bit of sharp practice, fraud

Congress repealed the Johnson-era federal CON law in 1986.

Michigan’s CON law persists. Dozens of amendments later, it is highly complex and expensive. Sliding scale fees doubled in 2013. Approval from the politically-appointed CON board can add hundreds of thousands of dollars to a planned hospital, HMO, surgical center, hospice, AFC, retirement home, laboratory, or EMS.

Who supports CON?

Nationwide evidence for repeal is growing. However, the Michigan Hospital Association advocates to retain the veto power MDHHS and industry insiders enjoy over new local hospital and psychiatric beds, MRIs, and more.

The state bureaucracy is understandably reluctant to kill the golden goose. Millions of dollars in fees is perfectly good money, after all. The bigger the project, the more revenue for the General Fund.

Legislative CON Repeal Action

In the face of that budgetary pull, the legislature is coming together with a list of changes. A 2021 bill to exempt PET Scans from CON already became law.

A package of bills passed the Michigan senate one year ago today, and awaits action in the house. Senate Bills 12, 181-183 and 190 would repeal CON for cardiac catheterization centers, add two citizen members to the 11-member CON Commission, and relax limits on some new psychiatric services.

Similarly, House Bills 5074-77 regulating the CON regulators for public transparency passed the state house unanimously last February, and are gathering dust in the Senate.

Two years ago, Michigan legislators ran comprehensive CON repeal bills before COVID-19 disrupted passage.

If CON repeal bills make it to Governor Whitmer’s desk, will she sign?

Adding two members of the general public to the 11-member CON Board is fairly uncontroversial. Previous governors have appointed the other designated positions from industry and unions. Assuming the bills pass before the end of 2022 or she wins re-election, this governor would be the first to fill the new seats. Designating more beds for welfare patients is probably acceptable to her as well.

However, in 2020 objectors within her party said some provisions created an unfair advantage – and they had a point.

Repealing limits on large capital expenditures and bed-shifting between facilities, while keeping a 35-mile protection radius and other CON limits on startups, may benefit wealthy HMOs and big hospital systems.

For patients like the young girl in pain waiting for an MRI, that could mean lower prices initially, BUT less choice and higher prices long term. For healthcare workers hoping for a choice of employers, it could mean a longer commute and lower wages.

Full CON repeal to allow an all-comers policy for start-ups would open Michigan’s healthcare to innovation and competition, as well as access to better quality and lower prices. We should congratulate bill sponsors for starting CON reform, and urge them toward full repeal.