Yaffee: Alabama Certificate of Need Laws are just a big CON

In 2023, my daughter Evangeline was born in the Huntsville Hospital location in Madison Alabama. I have to say it was a great experience. I’m also glad I didn’t have to drive much further away to Huntsville from Athens while my wife was in labor. I’m definitely thankful for that closer facility in Madison.

At the time the hospital was first being proposed, there were some who tried to block its construction. They made that argument to the Alabama Certificate of Need (CON) Board. That’s right. In Alabama, a so-called conservative state where leaders value the power of the free market, if someone wants to build a medical facility, they have to go through technocrats on a government board that picks winners and losers.

Currently this useless government bureaucracy is delaying the approval of a new ambulatory surgery center in Montgomery being proposed by the Southern Orthopedic Surgery Center. The Baptist Medical Center South and Jackson Hospital oppose the project.

While there might be some fair arguments for opposing such a project, it seems to me that the best thing for Alabamians is more options and more competition when it comes to healthcare. Instead we have a government organization that exists primarily to limit competition. This is not how a market should work in a free state like Alabama.

Don’t just take my word for it though. Just look at a 2024 report published by the Commonwealth Fund. The repot highlighted how Alabama consistently ranked in the bottom quartile for health care quality and outcomes.

The problems with CON laws also became more evident during the COVID-19 pandemic. According to research done by economists at the the University of Cincinnati, Auburn University, and Southern Illinois University, states that had those laws also had increase mortality rates for COVID-19 patients and others.

Outside of poorer healthcare outcomes, it also incentivizes corruption. Alabama State Auditor Andrew Sorrell explained how this can happen during an interview on my radio show a few years ago.

“Richard Scrushy was the CEO of HealthSouth and he figured out that if he could get appointed to that board, he could vote no on all of his competition building a new hospital,” Sorrell said. “So, he gave $500,000 to Don Siegelman’s lottery campaign in exchange for a seat on the Certificate of Needs Board. Now, of course, both of them later ended up in jail, but we’ve done absolutely nothing to correct the problem with the Certificate of Needs Board since that happened. We’ve learned nothing from that mistake and I think that’s a real tragedy.”

When I first heard about CON laws, it sounded like something straight out of the former Soviet Union. Imagine if we had something similar for every other part of our economy. Should new grocery stores have to go through a government review board? Should new restaurants have to go through a government review board? We wouldn’t put up with that, and we shouldn’t put up with it in our healthcare system.

The good news is it doesn’t have to be this way. We can follow the lead of several other states that have already passed reforms. In the last several years, Georgia, Tennessee, and Florida passed changed their CON programs to encourage health care innovation in their states. South Carolina repealed its CON law altogether.

If leaders in the Yellowhammer State are serious about promoting free-market, limited government, conservative policies, then it’s time they prove it to the people: Abolish the big CON.

Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on X @Yaffee