As recently as this year, conservative members of the Tennessee General Assembly worked to repeal these archaic laws from the books in an effort to bring competition back to the healthcare industry instead of the regional monopolies that have been created by legislative force. HB 966 sponsored by Rep. Bud Hulsey would have made great strides along these lines. Yet, the bill was defeated in a subcommittee.
During the committee hearing, some members harkened to rumblings that the bill might be unnecessary due to efforts that the administration is making to supposedly phase out certificate of need in Tennessee by July 1, 2026. So, why pass a bill to repeal it when we can just do it later, right? Chairman Hawk then suggests that many people are wary of the phase out claiming that the new scheme is simply going to be CON 2.0, we are just changing the name.
During testimony, a representative of the Health Facilities Commission(3), Logan Grant, responded by stating,
“It will still have components that the General Assembly has found to be valuable, such as, evaluation of the quality of a proposed project.” (see video)
If you can read between the lines as I can, you may rightly infer that this statement in no way insinuates that the administration has any intention of letting go of its oversight of healthcare in the state of Tennessee and will indeed continue to employ some version of Certificate of Need regulation.
This is unfortunate considering that researchers find that these laws tend to restrict access to healthcare, make services more expensive, and undermine the quality of care.(4)
The Mercatus Center at George Mason University has worked to study this issue for quite some time and in a comprehensive study from 2016 presented the following conclusion.
“…we find no evidence that CON laws increase the quality of care. Instead, we find evidence consistent with the hypothesis that limiting entry results in lower hospital quality.
For example, we find that mortality rates are statistically significantly higher at hospitals in CON states than in non-CON states. Our findings show that the estimated average 30-day mortality rate for patients discharged with pneumonia, heart failure, or heart attack from hospitals in CON states is between 2.5 and 5 percent higher than the average mortality rate for all hospitals in our subsample of HRRs that contains providers in both CON and non-CON states, depending on the illness. These findings are largely robust to a variety of alternative samples and quality measures.”(5)
Now, you might be wondering, “How does this play out locally in terms of the healthcare options in my community?”
Recently in Williamson County, TriStar Southern Hills Medical Center applied for a Certificate of Need (CON) for the construction of a freestanding emergency department (FSED) in the City of Nolensville. One could assume that increased access to emergency care is a positive for the community. In fact, residents of Nolensville very much supported the effort for obvious reasons.
However, attorneys Adams and Reese LLP on behalf of their client, Williamson County Medical Center, filed a letter of opposition to the application citing that “In 2023 it opened an EMS station in the town of Nolensville, where it bases an ambulance and provides ambulance services to the public. WMC is slightly more than 9 miles from the proposed site of the CON project, according to Google Maps. WMC opposes Southern Hills Hospital’s FSED CON application for numerous reasons.”(6) In other words, Williamson Medical has an ambulance that can get a patient from Nolensville to the emergency room in Franklin nine miles away. So, why does Nolensville need its own emergency center? A pretty stunning statement of opposition if you ask me.
Yet, County Mayor Rogers Anderson, Rep. Sam Whitson, and Senator Jack Johnson who are supposed to represent the people of Nolensville and Williamson County, all issued opposition to the CON application and defended the notion that WMC should be only option for emergency care for the residents of Nolensville.
In a letter dated June 12, 2023 (letter embed below), Sen. Jack Johnson wrote to the TN Health Facilities Commission stating,
“Freestanding emergency departments typically serve as vital resources in rural communities where nearby emergency services are limited. However, considering that the Williamson Health flagship hospital, Williamson Medical Center, is located less than 10 miles away from Nolensville, I believe that the proposed FSED may not be necessary to fulfill the needs of our community.”
It is truly dumbfounding to watch an elected leader advocate for fewer healthcare options for the people of his district by force of government regulation while at the same time claiming to be a champion of private business enterprise and the free market. The delusion is real. And certainly, there are most likely a few campaign contributions involved.
Fortunately for the people of Nolensville, the Health Facilities Commission voted 7-0 in favor of the newly proposed FSED and approved the certificate of need. This is most likely due to the fact that citizens showed up at the meeting to advocate for themselves and won the day, despite the attempts of establishment politicians to take away healthcare options from the communities they were elected to represent.
Certificate of Need laws must be repealed at all levels. The idea that government should be used to interfere with free-market practices in order to provide more equitable outcomes is straight out of the Marxist playbook and only purports to cede more control to centralized administrative bureaucracies. This is not conservative, and it needs to come to an end in Tennessee.
As a fun note to end on, I ran against Jack Johnson for his state senate seat in 2022. A group of citizens invited us to an event to answer questions, sort of like a debate. The question was asked (paraphrasing), “What would you do to provide for better healthcare in our communities?”
My answer was to restore a free-market healthcare system and repeal CON laws. Jack’s answer, “We should encourage people to eat better and exercise more.” I will leave it there.
In case you thought that Tennessee had a free-market healthcare system…it is just a big CON.
Since 2020, Tennessee Stands has been heavily engaged in the fight for medical freedom against government overreach, especially when it comes to the private rights of citizens to direct their own healthcare decisions. We have worked to support legislation that protects healthcare workers, employees, families, and children from being coerced into healthcare decisions that run contrary to their personal beliefs and well-being, most notably government and employer requirements for vaccinations.
But time and time again in Tennessee, members of the General Assembly preach their own brand of “conservative values” espousing that employers have private rights to enact any requirements they so choose over their employees. In their words, “that is liberty,” and “we don’t place regulations on private businesses here in Tennessee.” No one has parroted this phrase to his constituents more than Senate Majority Leader Jack Johnson. But he is not alone.
The truth is, not only do we regulate businesses here in Tennessee (as does every state in the Union), but in the world of healthcare, our legislature has handed the power to a board of bureaucrats under the TN Department of Health to determine whether or not a healthcare facility even gets to exist. How is that for regulation?
According to the National Conference of State Legislatures (NCSL), Tennessee is one of 35 states that employ a regulatory scheme called Certificate of Need (CON).
“Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities. In a state with a CON program, a health planning agency or other entity must approve the creation of new health care facilities or the expansion of an existing facility’s services in a specified area.”(1)
The first question you might ask yourself is, “Why would a state legislature get to determine whether or not my community should have a particular healthcare service?” And your next question might also be, “Why would state legislators take it upon themselves to have the competency to make these determinations other than healthcare providers and the free market?” And those are both very legitimate questions, the answers to which can reasonably be, “they should not.”
“In 1974, the federal government passed the National Health Planning and Resources Development Act. The legislation withheld funds from states who did not enact certificate-of-need programs. By the early 1980s, every state except Louisiana had enacted a version of CON laws. These laws were originally put in place to control healthcare costs, increase healthcare quality, and improve access to care for low-income families.”(2) (emphasis added)
When you read the closing statement of the stated purpose of CON laws, there is a phrase that comes to mind that has become all too familiar in recent political speech…equity. Because that is what we all want, right? Equitable access. But what many of us realize by now is that using the force of government in the valiant (sarcasm) effort to provide for equity really only means one thing…control. And that, perhaps, is the unstated goal of it all.
Considering this, how is it that in 2023, Tennessee which considers itself to be pro-business, pro-free-market, and the financial hub of healthcare nationally still be a state with such a heavily regulated healthcare industry? Well, most likely because of that last part, the money.
And even amongst the 35 states with CON laws, Tennessee ranks as one of the most highly regulated and subject to its health planning board per the Mercatus Center. (see chart) While Florida does have certificate of need regulations, they are much less burdensome and only impact nursing homes and hospice care. Florida repealed its CON requirements for hospitals with HB 21 in 2019. Meanwhile, in Texas, their healthcare industry is subject only to the market, meaning, it is the people who get to decide what healthcare options they have in their community – such a novel concept in America, seemingly.
As recently as this year, conservative members of the Tennessee General Assembly worked to repeal these archaic laws from the books in an effort to bring competition back to the healthcare industry instead of the regional monopolies that have been created by legislative force. HB 966 sponsored by Rep. Bud Hulsey would have made great strides along these lines. Yet, the bill was defeated in a subcommittee.
During the committee hearing, some members harkened to rumblings that the bill might be unnecessary due to efforts that the administration is making to supposedly phase out certificate of need in Tennessee by July 1, 2026. So, why pass a bill to repeal it when we can just do it later, right? Chairman Hawk then suggests that many people are wary of the phase out claiming that the new scheme is simply going to be CON 2.0, we are just changing the name.
During testimony, a representative of the Health Facilities Commission(3), Logan Grant, responded by stating,
“It will still have components that the General Assembly has found to be valuable, such as, evaluation of the quality of a proposed project.” (see video)
If you can read between the lines as I can, you may rightly infer that this statement in no way insinuates that the administration has any intention of letting go of its oversight of healthcare in the state of Tennessee and will indeed continue to employ some version of Certificate of Need regulation.
This is unfortunate considering that researchers find that these laws tend to restrict access to healthcare, make services more expensive, and undermine the quality of care.(4)
The Mercatus Center at George Mason University has worked to study this issue for quite some time and in a comprehensive study from 2016 presented the following conclusion.
Now, you might be wondering, “How does this play out locally in terms of the healthcare options in my community?”
Recently in Williamson County, TriStar Southern Hills Medical Center applied for a Certificate of Need (CON) for the construction of a freestanding emergency department (FSED) in the City of Nolensville. One could assume that increased access to emergency care is a positive for the community. In fact, residents of Nolensville very much supported the effort for obvious reasons.
However, attorneys Adams and Reese LLP on behalf of their client, Williamson County Medical Center, filed a letter of opposition to the application citing that “In 2023 it opened an EMS station in the town of Nolensville, where it bases an ambulance and provides ambulance services to the public. WMC is slightly more than 9 miles from the proposed site of the CON project, according to Google Maps. WMC opposes Southern Hills Hospital’s FSED CON application for numerous reasons.”(6) In other words, Williamson Medical has an ambulance that can get a patient from Nolensville to the emergency room in Franklin nine miles away. So, why does Nolensville need its own emergency center? A pretty stunning statement of opposition if you ask me.
Yet, County Mayor Rogers Anderson, Rep. Sam Whitson, and Senator Jack Johnson who are supposed to represent the people of Nolensville and Williamson County, all issued opposition to the CON application and defended the notion that WMC should be only option for emergency care for the residents of Nolensville.
In a letter dated June 12, 2023 (letter embed below), Sen. Jack Johnson wrote to the TN Health Facilities Commission stating,
It is truly dumbfounding to watch an elected leader advocate for fewer healthcare options for the people of his district by force of government regulation while at the same time claiming to be a champion of private business enterprise and the free market. The delusion is real. And certainly, there are most likely a few campaign contributions involved.
Fortunately for the people of Nolensville, the Health Facilities Commission voted 7-0 in favor of the newly proposed FSED and approved the certificate of need. This is most likely due to the fact that citizens showed up at the meeting to advocate for themselves and won the day, despite the attempts of establishment politicians to take away healthcare options from the communities they were elected to represent.
Certificate of Need laws must be repealed at all levels. The idea that government should be used to interfere with free-market practices in order to provide more equitable outcomes is straight out of the Marxist playbook and only purports to cede more control to centralized administrative bureaucracies. This is not conservative, and it needs to come to an end in Tennessee.
As a fun note to end on, I ran against Jack Johnson for his state senate seat in 2022. A group of citizens invited us to an event to answer questions, sort of like a debate. The question was asked (paraphrasing), “What would you do to provide for better healthcare in our communities?”
My answer was to restore a free-market healthcare system and repeal CON laws. Jack’s answer, “We should encourage people to eat better and exercise more.” I will leave it there.
1. Certificate of Need State Laws. (2023, June 27). https://www.ncsl.org/health/certificate-of-need-state-laws
2. Walsh, C. (2021, November 3). Certificate-of-need laws: Why they exist and who they hurt. State Policy Network. https://spn.org/articles/certificate-of-need-laws/
3. Health Facilities Commission Executive Director. (n.d.). https://www.tn.gov/hsda/health-services-and-development-executive-director.html
4. CON Laws in 2020: About the Update. (2021, February 19). Mercatus Center. https://www.mercatus.org/publication/con-laws-2020-about-update
5. Stratmann, T., & Wille, D. (2018). Certificate-of-Need Laws and Hospital Quality. Social Science Research Network. https://doi.org/10.2139/ssrn.3211657
6. https://www.tn.gov/content/dam/tn/hsda/documents/CN2304-010_Opposition.pdf
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Gary Humble
Gary Humble