Thank You CON Reform Champions for Supporting Increased Competition and Expanded Access to Quality Health Care

By Jeffrey Mazzella

The Tennessee legislature tackled many important priorities last session, but the significance of the 113^th General Assembly’s legislation to help spur greater access to quality, affordable health care across our state cannot be overstated.  

Specifically, the legislature passed key reforms to the state’s Certificate of Need (CON) law to reduce unnecessary government regulation that for too long has empowered a board of unelected government bureaucrats to insulate incumbent healthcare providers from competition and limit access to care for patients.  

The support from legislators across the state for those reforms, which include phasing out Tennessee’s CON requirements for certain freestanding emergency departments, ambulatory surgery centers and MRI services, among other critical healthcare disciplines, merits significant praise from all Tennesseans.  

As several legislators pointed out upon passage of those reforms last session, however, more work remains. With many healthcare services still requiring CON approval, including for new acute care hospitals, the 114^th General Assembly has a landmark opportunity to fully repeal Tennessee’s remaining CON requirements in the upcoming session. 

For those unfamiliar, CON laws require hospitals and other healthcare providers to demonstrate a “need” for and receive government permission to build new facilities and offer certain healthcare services. Not only is that approval process governed by unelected officials unaccountable to voters, but incumbent providers also get a say in whether new facilities are permitted to open or new services can be offered by competitors in their geographic areas. Unsurprisingly, those existing providers often lobby intensely to protect their competitive advantage – with little concern for what’s best for patients.   

The CON process thus imposes a massive regulatory barrier against necessary healthcare expansion, something sorely needed in a state with rapid population growth like Tennessee. Even if permission to open a new hospital, for example, is eventually approved, the CON application process costs providers hundreds of thousands of dollars or more and adds years onto the already lengthy process it takes to build.

It’s no wonder the last seven presidential administrations – from Reagan to Biden – have all agreed that state CON laws are bad for health care.  Indeed, it is what prompted President-elect Donald Trump’s administration to strongly urge states to repeal their CON laws, noting that they are anti-competitive, harmful to consumers and “likely to increase, rather than constrain, health care costs.”

The detrimental effects of CON laws certainly have been felt here in the Volunteer State.  According to a report by the Beacon Center of Tennessee, which looked at the impact of the state’s CON laws over a more than two-decade span from 2000 to 2022, a whopping 5.5 million Tennesseans have been denied increased access to healthcare services and Tennessee communities have lost over $700 million dollars in direct investment as a result of the state’s CON denials. “In fact,” reads the report, “if we repealed all of Tennessee’s current hospital CON laws, there could be up to 63 more hospitals in the state, with 25 located in rural areas.”

Tennessee’s rapidly growing population is expected to hit nearly eight million residents by 2040 – a 13 percent increase over 2022. As the 15^th most populous state in the country, we must ensure that our healthcare system keeps up with that pace of growth and healthcare providers are available when and where patients need them.

Repealing CON requirements helps achieve that end by enabling hospitals and other healthcare facilities to more efficiently meet market demands, better ensuring the state doesn’t fall behind or leave growing areas underserved. 

For their part, Tennesseans have made their voices heard – sending tens of thousands of letters to their legislators last session advocating for full repeal of the state’s CON laws. The overwhelming grassroots showing buoyed the laudable reforms passed by the legislature earlier this year.    

Tennesseans should be grateful that strong, principled conservative leaders who answered the call and supported those reforms, and we stand ready to support full repeal of Tennessee’s remaining CON requirements when the 114^th General Assembly convenes in January.

Jeffrey Mazzella, a Tennessee resident, is President of the Center for Individual Freedom. 

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