A recent CNN article shows that 53% of rural hospitals in the state of Georgia are at risk of closing if Medicaid funds are cut.
As usual, CNN does not tell the whole story. Georgia is one of a few states which still has a Certificate of Need (CoN) which is granted by a review board consisting of a few elite administrators of existing hospitals. This board decides which hospitals can be formed and where.
Is it possible that these administrators are influenced in any way to protect the interests of their own hospitals? Of course, they are. Could it be the CoN board members are more agreeable to approve hospitals which do not cut into their market of patients? Of course, they are.
Profit motive is a strong motivator and is no vice. But, because of it, we should avoid placing important economic decisions in the hands of a few so-called experts.
Would rural hospitals in Georgia have been established in areas with a sustainable commercial market but for the CoN requirement? Perhaps. But, that is not the public’s concern provided the hospitals are private enterprises. As private enterprises, hospitals should be free to take risks and establish their services in anticipation of consumer demand. Yet, they should also bear to cost and potential rewards of those risks and not the public.
The CNN article implies that the solution is more Medicaid funding. Such solutions will only increase state dependency on federal taxes. And, with $20 trillion in federal debt, states increasingly relying on federal funds will only make matters worse.
At the root of virtually every problem in healthcare you will find a government program. The solution is less government and more freedom.
I say eliminate cronyism and allow free markets to work. For these reasons, the Freedom First Health Reform plan calls for the elimination of CoN requirements in states like Georgia.