"Congress should also act now to pre-empt certificate-of-need laws because they interfere with the proper functioning of health care markets in interstate commerce." So states the April 30 commentary ("State certificate-of-need laws must go") calling for elimination of such laws in dozens of states.
Minnesota's state "Certificate of Need" law went away a long time ago. It was in effect only from 1971 to 1984. (Since 2004, according to the National Conference of State Legislatures, Minnesota has only a modified public review process for hospitals seeking exceptions to the state's hospital bed moratorium law.) So if health care markets are "not functioning properly" here, the blame cannot be laid at the door of Certificate of Need.
What was the certificate of need, and why was it operational? Having served as the vice-chair of the Metropolitan Health Board (a subset of the Metropolitan Council) from 1971-75, I have a partial answer for this.
Health care, at that time, was still primarily a nonprofit business, although that was about to change on the national scene. Newer and increasingly more expensive diagnostic technologies were coming on the market, and there was a concern in government that health care costs would balloon when every doctor's office might want a new CAT (computer-assisted tomography) scanner at a cost of $50,000. (I know, it seems quaint today, both the cost and the concern.) Why not encourage sharing of such technologies?
Thus a process was put in place by the Minnesota Legislature to review new health care costs that exceeded a certain amount. They called the process "Certificate of Need." At the Metropolitan Council, professionals in the health planning arena were hired as staff to the Health Board to advise its citizen members as applications for expensive equipment or buildings were received. These plans had to pass through the Health Board for review.
As vice-chair of the board, I was asked to chair the review committee for a University of Minnesota application for what was then termed the "B-C" building. The university had to make a case for its need for another new building. The staff advised, and the task-force citizen members played their part by asking informed questions. That's how the public review process worked.
The university, of course, received permission to move ahead with the building project, which today is known as the Phillips-Wangensteen Building. That permission would be given was never in doubt. But in the exchange the Health Board members also moved forward their agenda: to gently remind the university of its responsibility to the larger community that supported it.
The result of this negotiation was an offer from the university to attend to its community obligations as well as its building plan, and this took the form of two major commitments: 1) to assist the expansion of the Community-University Health Care program, commonly known as CUHC, and 2) to expand support for its Rural Physician program.