A proposal to deal with Vermont’s health care crisis

By Jaimie Cavanaugh and John Sweeney 

Certificate of Need (CON) laws have been—and continue to be—an albatross around the neck of our nation’s healthcare industry. CON laws limit the supply of healthcare services in roughly two-thirds of the states, limiting patients’ healthcare options and preventing innovation in the industry. 

After experiencing the downsides firsthand, states like South Carolina and Oklahoma have repealed most of their CON laws, allowing for competition in the market and bringing growth to their healthcare industries. Vermont should follow their lead and do the same.  

CON laws require healthcare providers to navigate a labyrinth of bureaucratic red tape before expanding healthcare in Vermont. It applies to new facilities, expanding existing facilities, purchasing new technologies that improve patient care, or even simply increasing the number of available beds. If a healthcare provider wishes to offer new services in a particular market, they must first apply to the state and prove a “need” for their services.   

In Vermont, a healthcare provider cannot construct, purchase, develop, or renovate a facility without first obtaining a CON. A CON is also required if a provider wishes to increase its capacity to serve more patients by adding more beds. Worse, existing competitors can intervene in the application process and object to issuing a CON application. This is a touted feature of CON laws, not a bug. 

When existing healthcare providers object to a new CON application, it often stops the application altogether. This “competitor’s veto” allows existing providers to monopolize the healthcare market, leaving patients with fewer options in the name of total control. 

Fortunately, many legislators around the country now recognize that CON laws lead to rising healthcare costs and long wait times. A real and needed trend toward freedom and competition in the healthcare industry is finally emerging.  

In Mississippi, for example, the House passed a bill that would repeal CON laws for substance use rehab facilities, in-patient psychiatric facilities, birth centers, and more. In West Virginia, the Governor just filed a bill to fully repeal CON. In Kentucky, a bill to repeal CON for birth centers passed out of the Senate without any opposition.  

While other states are putting patients first, Vermont is lagging.  

Last year, a report by the Green Mountain Care Board determined that Vermont’s healthcare system is on the edge of a crisis due to rising costs and limited availability. The report also called on lawmakers to prioritize policies to recruit more healthcare providers. But even where new providers are ready to open, they are still required to comply with Vermont’s burdensome CON regime and will likely be blocked by current providers that don’t want the competition.  

The report also found that Vermont’s primary and specialty care clinics have long wait times, denying patients urgent and routine visits within reasonable timeframes. To address this, it is recommended that non-hospital-based access and treatment options be expanded. However, unless Vermont removes its CON requirement for constructing and developing new healthcare facilities, the lines will keep getting longer, forcing people to leave the state or forego care altogether. 

One great option for expanding non-hospital-based services is to allow freestanding birth centers to open. Birth centers provide safe care for low-risk pregnancies. While Vermont prohibits access to these valuable healthcare facilities, its neighbor, New Hampshire, has been a national leader in promoting birthing for decades. Vermont would make reforms in line with states like Connecticut, Georgia, Michigan, and West Virginia by allowing birth centers to open.  

You can see the pattern. CON laws are a barrier to improving Vermont’s struggling healthcare system. Thankfully, the legislature has heeded this call and is considering a bill to raise the capital expenditure threshold that triggers a CON application. The legislature is also considering repealing CON for birth centers altogether. It absolutely should. 

But there is more to do. Citizens in Vermont deserve access to affordable, quality health care. It’s time for the government to get out of the way and return health care decisions to patients and their doctors.  

Jaimie Cavanaugh is an attorney, and John Sweeney is a legal policy analyst at Pacific Legal Foundation, a public interest law firm that defends Americans’ liberty against government overreach and abuse.