Legislative Review: Freeing the Markets for Education and Health Care

Jaimie Cavanaugh
Jaimie Cavanaugh
 ·  August 1, 2023

At IJ, we can’t accomplish every goal through litigation. So we press forward on many fronts, including legislation. This past year, IJ’s legislative team supported more than 160 bills in 48 jurisdictions, culminating in 37 enactments. Here are some standouts.  

First, this session was a watershed year for educational choice. Ten states created or expanded choice programs. Even better, the programs in Arkansas, Iowa, Florida, and Utah are universal, meaning any K–12 student in the state is eligible.  

Second, we saw growth in our efforts to protect property rights. We enacted civil forfeiture reporting bills in Colorado and Nevada. These reforms require law enforcement to gather and publicize forfeiture data. And our work on fines and fees expanded with five enactments. Among those was a bill in Vermont to end the destructive practice of suspending driver’s licenses for failure to pay traffic citations.  

Finally, as the national leader in economic liberty legislation, IJ introduced nearly 70 bills in 34 states. The team worked to reduce cosmetology licensing barriers, to make it easier for ex-offenders to get occupational licenses, and to expand cottage food laws.  

Perhaps the most pivotal victory this session, however, came out of South Carolina. There, IJ recorded its first major legislative victory repealing a certificate of need (CON) program in health care. Even three years ago, this seemed all but impossible, yet the House voted (and the Senate concurred) unanimously on nearly full repeal of the state’s robust CON program.  

A CON is a government permission slip to compete in the health care market. Before a medical provider can open or expand a health care facility or add services, it must prove to the government that a “need” exists. Worse, direct competitors (often large hospitals) can intervene during the application process and argue that a new competitor would hurt their bottom lines. The government often sides with incumbents and denies applications.  

One purported justification for CON laws goes as follows: If too many facilities—say, imaging centers—open, none will have enough patients to be profitable and doctors might start ordering unnecessary tests to turn a profit. 

Naturally, this has been disproven. States with CON laws have fewer health care facilities, and research shows health care is more expensive in these states. Individual procedures are more expensive, per capita expenditures are higher, and government payors pay higher costs in states with CON laws. By any measure, CON laws have utterly failed to control costs. 

Previously, South Carolina required a CON for many usual categories like rehab facilities, psychiatric hospitals, ambulatory surgical centers, and radiology facilities. But South Carolina also required a CON for niche services that are nearly impossible to “over-prescribe,” like neonatal intensive care services and open-heart surgery. There is no justification for limiting access to needed services. 

Equipped with South Carolina’s strong example, we will continue to advocate nationwide to inject some much-needed free market forces into health care and ensure that patients and providers—not bureaucrats—will decide when care is needed.

Jaimie Cavanaugh is an IJ attorney.

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