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South Carolina & It’s Certificate of Need Laws

In the same year that South Carolina decided to not remove the Certificate of Need requirement for hospitals/medical providers, they have decided just one hospital will be exempted from that need.  Just one. The regulations themselves will remain on the books and will apply to everyone else.

The exemption is buried deep within an appropriations bill that reads, “For the current fiscal year, the relocation of a licensed hospital in the same county in which the hospital is currently located shall be permitted,” the bill reads, in part.

Normally, such permission is granted via the state’s Certificate of Need (CON) process, overseen by the Department of Health and Environmental Control. It was that same permitting process that held up the construction of a new hospital in Fort Mill, South Carolina, for well over a decade.  By inserting these few lines into the appropriations bill, lawmakers are creating a special loophole in those rules.

Though it isn’t immediately obvious from the text of the bill, the hospital that seems likely to benefit from the exemption is Roper St. Francis Healthcare, which announced plans last year to spend $500 million relocating from downtown Charleston to another part of the city. To say that Roper is a Charleston institution is probably an understatement: the hospital has been around for so long that wounded Civil War soldiers were treated there.

The project ran the risk of being tangled in CON-related red tape, the paper noted back in November: “Many of the key components of the 2030 initiative will require approval through the S.C. Department of Health and Environmental Control’s Certificate of Need program, which is set up to evaluate plans for new hospitals and hospital growth. Not only will Roper St. Francis need to make a regulatory case for these plans, history shows it will also likely face pushback from competing hospital systems in the region.”

If the relocation means better care and easier access for patients, then state lawmakers are probably doing the right thing by making sure that the project isn’t subject to the time-consuming, expensive litigation associated with navigating the CON review process. but if that’s true for this hospital in this situation, isn’t it true for hospitals around the rest of South Carolina too?

An established hospital getting to make an end-run around the same rules that are often used to keep new competitors out of the health care market is a useful illustration of what critics often say about CON laws looking after the established institutions by eliminating new competition from forming around them.  Is this to the benefit of the providers or the community they serve?

This is the same concern many have to exceptions to law.  When one person or a group of people are treated differently or not allowed the same rights many in the law claim discrimination or antitrust violations.  Yet this is government provided antitrust violations placing one set of businesses above another.  Imagine if every business had to show the need in the community prior to opening a new restaurant or retail establishment?

The same concept applies to Tort Claim Laws and Tort reform in our legal system where one group of people (the government and many times medical providers) are treated with special privileges that the average citizen does not have.  Where businesses have special protections or limitations, that other businesses do not have.

How about we treat all people and businesses equal and allow them the same opportunities to succeed – or fail.  Lets give everyone and every business the same support instead of picking favorites.  In the end, if the government does not apply the law equally to all people, then the government does not view all people as equal.

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