One Way to Lower Medical Costs

Have you ever heard of a Certificate of Public Need (COPN)? 

No? 

Don't worry, you're not alone. But just because you're not familiar with the term, most certainly doesn't mean that it doesn't affect you. 

The concept was initiated in New York in 1964, which honestly, I don't find surprising. 

The idea is that healthcare providers must provide government officials with proof that they actually have a need for particular hospital expansions or medical equipment purchases before they can actually make those improvements. 

The theory behind COPNs is that when there is too much competition among healthcare providers, prices will continue to drop and drop until all of the healthcare providers in a particular area will lose money/go bankrupt. This in turn would lead to less healthcare availability in areas than there was before. 

So, in other words, if I was just some random dude who wanted to start up "Aden's Mobile MRI Team", offering MRI scans for $100 a pop, I would have to first get a certificate of public need. The proper officials could then decide that, no, there's already one MRI machine in my town, and that there's no need for more. Therefore, my request could be denied, and my community would be denied my services. 

The one remaining MRI machine, at the local hospital, would then be able to safely charge $5000 per scan. 

Do you see the problem here?

The free market has been withdrawn, the state gets to decide who can do business, and competition has been killed. Prices can then be set exorbitantly by the victor, as they now have a virtual monopoly over their geographic region.

Are you a hospital administrator who wants to expand your emergency department's number of beds? Constantly getting overloaded on Saturdays? Welp, you better hope that your COPN gets approved, and that the proper officials do in fact deem that you do deserve those extra beds. 

So then what happens? 
A) Patients are shifted to empty floors on the hospital, where they are going to be cared for by staff that is not necessarily trained to care for their particular conditions. This in turn leads to a higher risk of medical accidents. If you have cancer, would you rather be treated by a oncology nurse, or by a diabetic-renal nurse? 

B) There's the potential to be turned away from a hospital. What if you show up to a ER that's booked? Odds are you'll be redirected to the nearest hospital with available ER rooms. You better hope that you're heart attack can wait that long to be treated. 

So do you see what I mean? 

Is there any benefit that is gained whatsoever from state intervention in a free market? I'll leave you to decide that for yourself in this case.