Folwell’s fight against hospitals extends to CON challenge at N.C. Supreme Court

State Treasurer Dale Folwell speaks at the 2022 Carolina Liberty Conference.

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  • N.C. State Treasurer Dale Folwell is urging the N.C. Supreme Court to take up a case challenging the state's certificate-of-need law.
  • Folwell argues that CON helps contribute to harmful health care monopolies. That harm threatens the viability of the State Health Plan for active and retired N.C. government employees.

The latest chapter in N.C. State Treasurer Dale Folwell’s feud with state hospitals involves a new friend-of-the-court brief at the state Supreme Court. Folwell supports a New Bern eye surgeon’s challenge of state certificate-of-need restrictions.

Dr. Jay Singleton is urging the state’s highest court to take up his lawsuit against CON regulations. Folwell filed a brief Monday backing up Singleton’s case.

“The issue at the heart of this case — whether North Carolina’s Certificate of Need law violates Article I, Sections 19, 32, and 34 of the North Carolina Constitution — is of significant public interest due to the harmful effects that illegal healthcare monopolies enabled by this law inflict on North Carolinians,” wrote Benjamin Garner, Folwell’s general counsel. “In theory, some argued, Certificate of Need laws would increase accessibility, quality, and affordability of healthcare services. In practice, however, Certificate of Need laws erect insurmountable regulatory barriers wielded by existing institutional healthcare entities to exclude others from entering the market.”

“Thus, Certificate of Need laws contribute to the creation of highly consolidated healthcare monopolies,” Garner added. “In turn, these monopolies decrease the accessibility, quality, and affordability of healthcare while dramatically increasing their prices and excess revenues, all at the expense of North Carolinians. Determining whether the Certificate of Need law runs afoul of the North Carolina Constitution’s protections against these types of harmful monopolies and special privileges is an issue of significant public interest justifying this Court’s review.”

Folwell’s brief explains how rising health care costs tied to CON could affect the State Health Plan, which serves 750,000 active and retired government employees. Folwell oversees the plan as state treasurer.

“Rising healthcare costs … pose a challenge to maintaining the solvency of the Plan and are a liability to taxpayers, who support the Plan through appropriations from the General Assembly,” Garner wrote. “These appropriations grow at approximately four percent per year, but the Plan’s costs continue to grow at approximately seven percent per year. Moreover, the Plan faces a $33.5 billion liability for retiree healthcare costs, with only $2.6 billion set aside from the General Assembly to cover that liability.”

“Thus, the healthcare monopolies maintained in part by the CON law are harming North Carolinians as consumers of healthcare and also as taxpayers.”

Singleton sued the state in 2020 because the CON law blocks him from performing most eye surgeries at his New Bern-based Singleton Vision Center. Singleton’s patients instead must drive to CarolinaEast, a nearby hospital with the area’s only state-approved CON.

In his appeal, the doctor argues he “could provide eye surgeries at his facility for thousands of dollars less than those same procedures cost at CarolinaEast.” CON restrictions stand in the way. “As a result, patients suffer while CarolinaEast profits,”

The N.C. Court of Appeals dismissed Singleton’s case on June 21. Because that decision was unanimous, the state Supreme Court faces no obligation to take the CON case.

The John Locke Foundation, which oversees Carolina Journal, also has filed a friend-of-the-court brief supporting Singleton.