The North Carolina Senate has approved a measure to repeal certain Certificate of Need (CON) laws across the state, a move that legislators hope will help drive down the state’s high health-care costs.
North Carolinians pay some of the highest health-care costs in the nation, which in part is due to CON laws heavily regulating the health-care space and restricting the establishment or expansion of health-care facilities and services in the state.
The laws frequently require health-care providers to secure a “certificate of need” before building new facilities, adding hospital beds, or buying major medical equipment. The process of securing a CON takes time and money, and competitors can tie up CON decisions in lengthy court battles or even obtain a CON they don’t intent to use so their competition cannot.
Senators are trying to reduce the burden through Senate Bill 370, which repeals certain CON laws across the state. The legislation passed the North Carolina Senate in a 31-17 vote on Tuesday, with two Democrats joining all Republicans in support of the repeal.
“This bill repeals North Carolina CON laws, which have been described as anti-competitive and unnecessary by successive presidential administrations since the Reagan era,” said state Sen. Benton Sawrey, R-Johnston. “North Carolina is one of the most heavily regulated CON states in the nation, and it’s time for us to join a growing movement in states, including our neighbors around us, that have moved away from this regime and looked at additional ways that we can deal with the allocation of resources within our marketplaces.”
The bill removes the need for state approval to establish or expand certain healthcare facilities and services starting in 2026, with additional repeals to fully dismantle the CON framework.
Several efforts are underway in the General Assembly to repeal CON laws, which Brian Balfour, senior vice president of research at the John Locke Foundation, applauded as a way to free up the market with more competition, leading to better prices and accessibility.
“Repealing North Carolina’s archaic CON laws is long overdue,” Balfour told CJ. “It’s absurd that healthcare providers need to get permission from the government to add to their facilities and provide more service to patients. This system restricts supply and decreases competition, which both drives up costs and diminishes much-needed access.”
A companion bill was filed in the House this session but it remains sitting in the House Rules Committee. Nevertheless, Senate Republicans have included CON repeals in their budget proposal as well, emphasizing their commitment to tackling the issue this year.
SEE ALSO: Companion bills to repeal CON laws filed in House and Senate
The budget proposal was introduced this week, and senators said it includes provisions to “address the skyrocketing cost of healthcare by repealing our state’s archaic certificate of need laws and implementing other healthcare reforms.”
“Local health-care providers know best what the patient needs in their community are, not some government committee often including representatives from big hospitals that want to deny their competition the opportunity to serve more patients. It’s time for CON to go,” Balfour added.
The budget proposal also exempts the new children’s hospital partnership between UNC and Duke Health Systems from CON laws to eliminate any potential barriers. The proposal allocates $638.5 million to North Carolina’s first children’s hospital, increasing the state’s total contributions to $855 million.
