LITIGATION BACKGROUNDER

Iowa Certificate of Need

Ending Iowa's CON Laws That Limit Medical Options and Enrich Established Businesses

For more than 20 years, Dr. Lee Birchansky has tried to offer his patients the option of having their cataract and other outpatient eye surgeries in a center right next to his office in Cedar Rapids. But the state of Iowa has stymied his efforts to open his own surgery center, forcing him to perform these surgeries at his competitors’ facilities.

How does this scheme work? Iowa makes it a crime for doctors to open up a new location and offer services without obtaining special permission known as a “certificate of need.” Permission is not easy to come by: Dr. Birchansky must persuade state officials that his outpatient surgery center is “needed” in the proposed location through a cumbersome process that resembles full-blown litigation and that allows existing businesses (his competitors) to oppose his application. This process amounts to nothing more than certificates of monopoly.

Iowa’s requirement has absolutely nothing to do with public health or safety. Separate state and federal laws govern who is allowed to practice medicine and what kind of medical procedures are permitted. Iowa’s CON program only regulates whether someone is allowed to open a new facility; it is explicitly designed to make sure new facilities are not allowed to take customers away from established healthcare facilities. It ensures that more money flows into the pockets of established businesses and prevents someone like Dr. Birchansky from expanding Iowans’ choices for medical care.

Patients and doctors—not state officials—are in the best position to decide what healthcare services are needed. That is why Dr. Birchansky, his patient Michael Jensen and another Iowa medical provider—Korver Ear Nose and Throat LLC—have joined forces with the Institute for Justice to challenge Iowa’s protectionist CON program. The U.S. Constitution protects the right to earn an honest living free from unreasonable government interference, and it protects a patient’s right to seek routine, safe and effective medical treatment from a qualified doctor. The Iowa CON program infringes on those rights, and that is why a federal court should strike it down.