Staff Columnist

Iowa health care industry's crony regulations make patients sick and poor

Who should make Iowans' health care decisions - patients and doctors, or bureaucrats and hospital executives?

One of the operating rooms at Fox Eye Laser & Cosmetic Institute on H Avenue NE in Cedar Rapids on Wednesday, Aug. 10, 2
One of the operating rooms at Fox Eye Laser & Cosmetic Institute on H Avenue NE in Cedar Rapids on Wednesday, Aug. 10, 2016. Area hospitals have objected to Dr. Lee Birchansky obtaining his own certificate to continue cataract surgeries at the H Avenue NE facility. (Liz Martin/The Gazette)

Iowa has well-documented gaps in health care access, especially in rural corners of the state. One impediment to greater access is the health care industry itself.

A few bills before the Iowa Legislature this year could lead to more health care opportunities for Iowans by loosening the medical establishment’s grip on the regulatory process.

The Iowa Hospital Licensing Board would be eliminated under a GOP Senate bill. The board is tasked, along with other state entities, with advising and reviewing regulations. This proposal would nix the six-member board and redirect those responsibilities to the Iowa Department of Public Health and State Board of Health.

The board has been criticized for unduly favoring the hospital industry. The former head of the Department of Inspections and Appeals, where the Hospital Board is housed, once complained “special interests have taken over government” after the board refused to adopt rules requiring more public transparency for medical errors, Iowa Capital Dispatch journalist Clark Kauffman reported last week.

Protectionism is the natural tendency of many government regulating boards. Not coincidentally, experts in the field who are qualified to serve as regulators often come from the business communities they are supposed to scrutinize.

Another set of bills targets one of the great scourges of medical regulation — certificates of need. In Iowa and most other states, health care providers must earn government permission before making significant investments. That includes new health centers, but also could include simply offering additional services or purchasing new equipment at an existing facility.

Plain and simple, certificate of need laws are a tool to stifle competition, restrict the supply of health care resources and sustain higher compensation for existing providers. Patients pay the higher prices and suffer from fewer choices.


The Heartland Institute estimates health care costs are 11 percent higher in certificate of need states. The Mercatus Center projects Iowa would get dozens of new health facilities and see individual annual health costs drop by more than $200 by ending the requirement.

Dr. Lee Birchansky of Cedar Rapids is a top critic of certificates of need. His application to offer cataract surgery has been denied four times, with opposition from existing facilities. After he filed a federal lawsuit, the state finally approved his application, but the decision has been appealed by competitors.

“The law ensures that more money flows into the pockets of those established businesses, and prevents small, locally owned facilities from competing,” Birchansky wrote in a Gazette guest column this year.

Republican House and Senate proposals to eliminate certificate of need requirements stalled last year in the face of opposition from the Iowa Hospital Association and other health care lobbyists, but they could be revived this year.

A final bill, sponsored by Senate Democrats, would exempt accredited birthing centers for the certificate of need process. It’s a limited but still meaningful response to Iowa’s shortage of obstetricians.

The question for Iowans is simple: Who should make our health care decisions — patients and doctors, or bureaucrats and hospital executives?; (319) 339-3156

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