Of transparency & the CON con

Of transparency & the CON con

Stung by criticism in the aftermath of the Fern Hollow Bridge collapse that detailed inspection and maintenance reports on bridges have been routinely kept from public view, City Councilman Corey O’Connor introduced an ordinance that would require the city to release what the Post-Gazette called “regular, public update reports on the status of city-owned infrastructure.”

Sounds like an idea long overdue. That is, as long as the measure really does include access to full details.

But the measure raised the ire of fellow Councilman Ricky Burgess who called it “legislative malpractice” and warned that it would expose the city to lawsuits.

O’Connor calls his proposal, now postponed until this week for consideration, a “win for transparency and a win for moving our infrastructure forward.”

And he’s right.

Burgess, on the other hand, argues that the council has a “fiduciary responsibility” as “officers of the city” to, in fact, keep such information from the public.

Spoken like a true bureaucrat.

Burgess says making public information that “our infrastructure is failing dramatically” would make those officers more vulnerable to lawsuits.

Here’s what Burgess is really saying: City Council has a fiduciary responsibility to cover its own behind for infrastructure nonfeasance.

How stunning is that?

A local newspaper editorial bemoans the fact that “health care providers are moving to increase their market share by building medical centers near competitors.”

“It’s like a high-stakes game of Risk, with each conglomerate moving its forces around the map to stake out territory while pushing out rivals,” the editorial says.

“But no matter which businesses (or, excuse us, nonprofits) win these competitions, regular people tend to lose. When bottom lines become more important than patients, something has to change.”

To that end, the editorial urges state legislators to revive, in some form but not in the prior, discredited iteration, “certificates of need.”

“CONs,” as they are known “come in addition to state licensing and training requirements for medical professionals,” Reason magazine reminds. “They require that all medical providers wanting to build or expand an existing health care facility, offer new services, or acquire new medical equipment must first gain approval from state regulators.”

To its credit, Pennsylvania killed CONs in 1996 for this very basic reason: It gives “The State” the power to protect entrenched health-care monopolies.

Nonetheless, the editorial argues that a “state oversight system with a limited mandate to reign (sic) in the most cutthroat practices could split the difference between inefficient government meddling and manic, expensive competition.”

So, we want government to determine “the most cutthroat practices”? No thanks. After all, this is the same “limited mandate” government that, among other things, all too regularly classifies as “gouging” normal supply and demand price fluctuations.

The evidence long has been clear that health care certificates of need are anti-competitive and keep costs high.

As Veronique de Rugy argued in Reason in 2015, CONs “were born out of bad economics and fears that the oversupply of hospital capacity would increase costs.”

“In theory, the regulation would cut health costs while increasing the provision of care for lower-income people,” she wrote. “By restricting market entry, lawmakers believed, the regulatory winners could be forced to use their government-inflated profits to subsidize indigent care or medical services to the poor. These services are seen as socially desirable but notoriously unprofitable to providers.

“Though the theory of cross-subsidization is well-established, in practice CON laws were soon captured by established interests that used them to keep competition out and raise the cost of medical services,” reminded de Rugy.

“In 1987, the federal government repealed its mandate [enacted in 1974] after recognizing the program as a failure. Though a few states have since retired their programs,” dozens of states “are still living under this type of law, with negative consequences for their residents.”

All that said, there’s also ample evidence to suggest that CONs led to a paucity of beds during the height of the coronavirus pandemic.

The bottom line is that health care certificates of need “were intended to limit the supply of health care services,” de Rugy says. “They succeeded. Not surprisingly, they also failed to contain the cost of health care.”

And as another Reason scholar, Christopher Koopman, concluded, keeping CON restrictions out of the mix “would open the market, create more competition, and ultimately give more options to those seeking care.”

More government-knows-best regulation would be a return to a proven failed public policy. And that would hurt “regular people” the most.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).