A Rare Victory Against Health Care

A Rare Victory Against Health Care-Strangling Red Tape

With Obamacare coming into effect, things are going to get worse before they get better.

A telling example of this comes by way of the Fourth U.S. Circuit Court of Appeals, which ruled this week that the state of Virginia may have violated the Constitution when it prohibited a doctor from opening shop simply to shield other businesses from competition.

Dr. Mark Baumel, a gastroenterologist, wants to buy CT scanners, which he will use to detect cancerous intestinal polyps in patients at three clinics that he proposes to build. Colorectal cancer claims the lives of over a thousand Virginians each year and is the second-leading cause of cancer death nationally. In large part, that’s because more than half of the people who should be getting screened are not.

It’s no mystery why. Traditional, invasive rectal inspections are more than mildly unpleasant and can cause infection and other complications. Dr. Baumel, however, proposes to conduct relatively cutting-edge “virtual colonoscopies,” eliminating the unpleasantness and minimizing health risks. Patients pay for a CT scan and, depending on the findings, can also opt for same-day polyp removal. (The procedure is recognized by the American Cancer Society and the American College of Gastroenterology.)

No other provider in Virginia offers the service, which has the potential to save many lives simply by improving screening rates. But state health officials won’t let Dr. Baumel spend his own money to buy a CT scanner.

To purchase expensive medical equipment in Virginia, one must first obtain permission from the government in the form of a “certificate of public need.” In the 36 states (and D.C.) with certificate-of-need (CON) laws, would-be providers must prove to health officials that there is a need for the service they wish to provide. Of course, in a market economy, entrepreneurs know they have hit upon a need after they set up shop and try to attract customers.

The Commonwealth of Virginia substitutes the market test with a panel of health planners who purport, as per the CON statute, to scrupulously evaluate 20 criteria, including whether a proposal might “undermine the ability of essential community providers to maintain their financial viability.”