NC Supreme Court to Hear Challenge to State’s CON Laws

The North Carolina Supreme Court is set to hear a case challenging the constitutionality of the state’s Certificate of Need (CON) laws.

CON laws were created as an attempt to control skyrocketing health care costs through government regulation. For example, when hospitals want to add beds to increase their inpatient capacity, they must incur costs – building new facilities, medical equipment for each of those rooms, staffing, and more. Those costs are then passed onto patients.

The intent behind CON laws was to prevent unnecessary expenditures when a need did not exist so those costs would not be borne by the consumer. The issue is, however, providers building facilities for which there is no demand largely does not happen. It is bad business.

The case challenging the CON law is being brought by Dr. Jay Singleton, an eye surgeon from New Bern, who is arguing that the regulations violate his rights under the North Carolina constitution.

Singleton claims that if the laws were not in place, he could provide the same care at a fraction of the cost.  

According to his legal filing, Singleton could perform cataract surgeries for $1,800, while the facility fee alone at the hospital which holds the CON, CarolinaEast, reaches almost $6,000.

But to utilize an operating room, you must have a CON. And currently, the only provider who has an operating room CON in the New Bern area is CarolinaEast.

“In fact, the only entity in Dr. Singleton’s area to ever own an operating room CON is CarolinaEast,” according to the Singleton’s lawyers. “Dr. Singleton cannot even apply for a CON unless the state first declares a ‘need’ for a new operating room in his area — which it has not done in well over a decade.”

‍

If Dr. Singleton did not think he could attract patients, he would not want to make the investment in an operating room.

But he knows that he can offer patients high-quality care at a fraction of the price compared to CarolinaEast.

“Dr. Singleton owns an operating room that he could use to expand patients’ access to safe, affordable eye surgeries,” according to the court filing. He “could provide eye surgeries at his facility for thousands of dollars less than those same procedures cost at CarolinaEast. But the CON law bars him from doing so. As a result, patients suffer while CarolinaEast profits.”

The intent behind CON laws was to control costs and protect patients.

Today, they do the opposite. They limit competition and patients end up paying more.

If the court does not address this, the North Carolina General Assembly should.