Imagine this: you decide to open a new restaurant serving hamburgers. You have your recipes, you have the location picked out and you are ready to comply with all the health and safety regulations. But, before you open, the government asks you to prove that the town needs more hamburger places. Meanwhile, a big national chain is opening up a new restaurant just down the street. The big chain, however, doesn’t have to prove there is a need, because it already owns three other restaurants in town.
That doesn’t sound fair, but that is actually how things work when it comes to offering certain health care services in Iowa. This week, the U.S. Court of Appeals in St. Louis will hear my case against a law that makes it almost impossible for new medical businesses to offer better care and better prices than existing businesses.
Iowa prohibits doctors, like me, to open up a new surgery center without obtaining special permission known as a “certificate of need” (CON). But existing centers already in business can expand their facilities or open new facilities without having to go through this process. And they can even oppose CON applications like mine on the very grounds that they’ve already expanded their business, so a new business isn’t necessary. This effectively gives existing businesses a monopoly over some services.
For over two decades, I tried to offer my patients cataract surgeries in a center adjacent to my medical office in Cedar Rapids. Existing surgery providers charged thousands of dollars in facility fees more than my center would. And they often failed to offer state-of-the-art procedures, like laser-assisted cataract surgery, that I wished to provide. Some of these existing facilities were large, impersonal hospitals: difficult to navigate for my elderly patients and exposing them to infections from all kinds of non-cataract-related illnesses. My surgery center is an easily accessible single-story center located right next to the same ophthalmological office already familiar to my patients.
But when I tried to open my center, I was denied a CON four times in a row. Every time, existing facilities opposed my CON applications because they see me as potential competition. One of them even told the government there was no need for new services while, at the same time, it was working to open a surgery center just four miles away from my office. Because it already operated a center, it didn’t need to get a new CON.
Iowa’s requirement has absolutely nothing to do with public health or safety. The state has no objection to doctors offering any of these services. In fact, Iowa had allowed my facility to operate years ago when it was affiliated with an existing facility, a hospital. But when I wanted to own and operate it independently, I was told I needed to go through the long and costly CON process.
Iowa’s CON program only exists because established businesses continue to lobby for it. The law ensures that more money flows into the pockets of those established businesses, and prevents small, locally owned facilities from competing. This drastically reduces Iowans’ choices and drives up the cost of medical care. But patients and doctors — not state officials — are in the best position to decide what health care services are needed.
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In 2017, I teamed up with the Institute for Justice to challenge Iowa’s CON program as unconstitutional. The U.S. Constitution does not allow the government to specially favor existing businesses over entrepreneurs merely because existing businesses have the clout to lobby for protection from competition. And it does not let the government put up arbitrary barriers to keep patients from safe, affordable medical care.
After we filed the lawsuit, and on my fifth try and 20 years after I started, Iowa finally granted me a CON for my surgical center. But that wasn’t the end: Existing facilities are appealing that decision in Iowa courts and a ruling in their favor could shut me down. I’m continuing my federal lawsuit so that I can continue serving my patients, and so that all Iowans can seek medical care without unreasonable and unequal government regulations
Dr. Lee Birchansky is an ophthalmologist from Cedar Rapids.