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How many hospital beds does Marion County need? Would it be helpful to have another substance use disorder center in Charleston? Or a CT scanner in Morgantown? West Virginia’s certificate-of-need program makes it the job of its Health Care Authority, rather than doctors and patients, to decide.

In February, the House of Delegates passed a historic reform to change this. At the end of the legislative session, however, the reform died an unceremonious death without consideration by the Senate or even the relevant committee.

The answers to the above questions depend partly on facts like a community’s size and available medical resources. But they also are likely to depend on subjective perceptions, like a community’s prospects for growth, whether caregivers might settle there, residents’ health and whether it might be better served by medical competition.

In many parts of the country, policymakers acknowledge that individual caregivers are in the best position to decide these questions. In these states — ranging from rural and low-income New Mexico to urban and high-income California — health care providers are free to open or expand their facilities to meet the community needs they observe. Patients enjoy greater access to care, at lower cost and higher quality.

Not so in West Virginia.

In the Mountain State, if you want to open or expand your health care facility, you must first obtain a certificate of need. And to obtain one, you must prove to a regulator that your community truly needs the service you want to offer. Other providers in the area — your prospective competitors — are allowed to object. And your request may be rejected if they can show that your service will duplicate — that is, compete — with theirs.

Certificate-of-need programs date back to the 1960s. In the 1970s, they were encouraged by federal legislation that withheld funding from any state that failed to adopt a certificate-of-need regime. The hope was that the process would, by centrally planning resource allocation, increase access to care, reduce costs and, maybe, even improve quality.

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When early evidence suggested that certificate-of-need regulation failed to do this, President Ronald Reagan and a Democrat-controled Congress repealed the federal mandate. Since then, 15 states have eliminated these programs, and several others have significantly pared them back. February’s reform would have eliminated the need for a certificate of need for hospital services in West Virginia.

Today, about 40 percent of Americans live in a noncertificate-of-need state. Health researchers and economists are able to compare patients’ experiences — their access to care, the cost of care and how well it works — with patients’ experiences in certificate-of-need states to see if these laws work as advertised. They don’t.

On a per capita basis, patients in certificate of need states have access to fewer hospitals, fewer ambulatory surgery centers, fewer dialysis clinics, fewer hospice care facilities, fewer medical imaging devices and fewer hospital beds. Rural communities in certificate-of-need states are at a particular disadvantage. There are not only fewer hospitals and ambulatory surgery centers in certificate-of-need states, but fewer rural hospitals and rural ambulatory surgery centers. Patients have to drive longer distances and are more likely to leave their states in search of care.

More is spent per patient and per procedure in certificate-of-need states relative to noncertificate-of-need states.

Worst of all, patients seem to experience lower-quality care in certificate-of-need states. For example, mortality rates following heart attacks, heart failure and pneumonia are higher. So are deaths from post-surgery complications and readmission rates following heart attacks and heart failure. Patients in these states also are less likely to rate their hospital stays a nine or 10 on a 10-point scale.

Each of these estimates is drawn from a peer-reviewed study with data from a large sample of states covering years worth and, in many cases, decades worth, of data. These studies also account for demographics and local economic conditions.

West Virginia would be wise to let Marion County’s providers judge for themselves how best to serve the community’s needs.

Matthew D. Mitchell is a senior research fellow with the Mercatus Center at George Mason University. He’s written several academic studies on the effectiveness of certificate-of-need laws, including “Certificate-of-Need Laws: West Virginia.”

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