Dr. Stacie Beck is a Senior Fellow at the Caesar Rodney Institute and a retired University of Delaware professor.
The state government has obtained a federal Rural Health Transformation Program grant to improve healthcare access in rural areas. Delaware’s plan focuses on a new medical school to expand the pipeline of physicians. While this is well and good in the long run, the state committed to a policy that would improve healthcare access, cost and quality much sooner and at no taxpayer cost, as a condition of the grant: eliminating or reforming the certificate of public review program.
Hidden barrier to healthcare access
Under the certificate of public review program, Delaware’s version of a certificate of need law, applicants must establish that there is a need for additional healthcare capacity before a certificate is granted to build it. This requirement was based on the mistaken idea that excess capacity raises prices. Instead, this program has proven to be a barrier to new entrants, thus protecting existing healthcare suppliers from competition. Reduced competition leads to less access, higher costs and potentially lower quality care.
The CPR application process is burdensome. Applicants are asked to provide extensive financial data, as well as the anticipated impact on existing providers. Applicants’ data is made public, thereby possibly giving away their competitive advantage.
The CPR review is conducted by the Delaware Health Resources Board. The board members are appointed by the governor and have included industry insiders. Records of votes by members are incomplete or missing. This is a picture of a regulatory agency captured by industry insiders with the goal of limiting competition.
Why CPR keeps providers out of Delaware
The CPR application process is, therefore, risky. Applications can be denied on a wide range of factors. Though only two applications out of 28 were denied (2014-20), there is no data on deferred applications. Delays in obtaining certificates can substantially increase the cost of expansions. Only six applications of 30 were decided in under 90 days. Delaware’s CPR law doesn’t just delay healthcare expansion; it discourages many medical providers from investing in Delaware in the first place.
We, at the Caesar Rodney Institute, have heard from healthcare providers. “We don’t want to come to Delaware because of the CPR law. It isn’t worth the investment to risk approval.” The chilling effect of the mere existence of the CPR program on new entrants is very real. It is likely the program’s greatest cost. But it leaves no data because those providers never applied.
Delaware should keep its promise
The Delaware legislature, in its letter of support for the state’s RHTP grant application, committed to CPR reform. In particular: “Delaware commits to eliminating or loosening Certificate of Need laws (known as ‘Certificate of Public Review’ in DE) to reduce regulatory barriers for providers establishing new facilities in rural areas” (Page 12).
CRI supports the full repeal of Delaware’s CPR law, as proposed in House Bill 318, sponsored by Rep. Bryan Shupe, R-Milford (currently stuck in committee). Previous efforts to reform CPR have focused on improving how it’s administered — not on loosening the law’s effect on restricting competition. Delaware’s CPR law still limits new entrants into the healthcare market.
Delaware would not be breaking new ground — many other states, such as Pennsylvania, have already repealed similar certificate of need laws.
Patients can’t wait
“I can’t get an appointment for months!” How often do we hear this? Delaware’s citizens are suffering from a lack of healthcare access now. Of all the actions and programs listed in the state’s Rural Health Transformation Program grant narrative, eliminating the CPR requirement is the action most likely to expand healthcare access and lower costs now, when we need it most. It costs taxpayers nothing. Delaware made this commitment to secure the RHTP grant. Let’s hope this finally gives state government the incentive to honor that commitment by eliminating the certificate of public review law once and for all in Delaware.
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
