This past spring the State of Georgia allegedly adopted "an overhaul" of its stringent Certificate of Need statutes. But that isn't stopping entrenched monopoly-minded industry interests from continuing to try and manipulate the choice-strangling regulations for their own competition-thwarting benefit.

A story in the Augusta Chronicle describes local political antagonism to a $34 million surgery and imaging center in Columbia County that, if built, will also serve as a venue for training new physicians -- which everybody agrees are in short supply in Georgia.

Primary opposition to the new facility -- a "65,000-square-foot center...(with) three operating rooms, two procedure rooms, an imaging center with a CT scanner and a clinic with 45 exam rooms" -- comes from, you guessed it, a competing hospital, which complains that the proposed new project is "a gross misapplication of limited health care financial resources."

Elsewhere in the state, a hospital CEO is warning county residents of the "negative implications" a new cancer treatment center would have for the community.

CON laws appear to be one of those rare examples in contemporary public policy where the federal government (which repealed CON mandates in 1987, and in 2004 said consumers would be better off if the states dumped theirs as well) is further around the learning curve than most states -- at least the 35 states and the District of Columbia that still have CON statutes on the books. Wrote Roy Cordato of North Carolina's John Locke Foundation in his October 2005 paper, "Certificate-of-Need-Laws: It's Time for a Repeal":

It is quite clear that all important aspects of the production, distribution, and sale of health care services in North Carolina, and most other states, have been removed from the competitive free enterprise system and placed under the authority of a command-and-control government bureaucracy. And like all other bureaucracies, it promotes factionalism and division and allows some groups and institutions to suppress the activities of others. The market is run by government fiat rather than entrepreneurial insight and patient preferences.
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As an historical footnote, in the 1960s and early 1970s, prior to the federal mandate, more than 20 states had decided to implement CON laws independently, allegedly for cost-control
reasons. According to Charles Gerena, writing for the Federal Reserve Bank of Richmond, these pre-mandate laws were implemented "in response to hospital operators who favored centralized health planning." This is consistent with the economics of CON...which suggests that in reality, CON is a cartel enforcement device that protects incumbent providers from new entrants and competition.

The reason these regressive, repressively protectionist CONs are so oppressive is pretty simple, and frankly can't be stated and restated enough: By suggesting that competition and expanding supplies of goods and services leads to rising prices and consumer dissatisfaction, CON advocates are willfully arguing in denial of the most elementary principles of market economics. As Cordato patiently re-explained in the Raleigh (N.C.) New-Observer back in May:

The problem with Certificate of Need laws is that they fly in the face of what basic economics suggests must happen if the rising tide in health-care costs is to be reversed. Cost control will require more, not less, competition in the market for health services.

The redundancy that such laws seek to avoid is what competition is all about. A market where there is no redundancy is by definition a monopoly market. The markets for electricity and first-class mail delivery are prime examples. To restrict redundancy is to restrict competition. And it is competition that puts downward pressure on prices.