Crisis To Cure: Government Intrusion vs. Free Market Innovation – Understanding Maine’s Certificate of Need Law

politics-healthcare

Health care spending in the United States far exceeds that of other countries, currently representing about 18 percent of the gross domestic product. If health care continues to grow at historic rates, it is expected to reach 34 percent by 2040. This is quickly eating up family budgets. From 2000-2009 health insurance premiums rose 8 percent compared to household incomes at about 2 percent. If this trend continues, health care will surpass household income by 2033.

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Why is health care spending such an outlier? In the overwhelming majority of markets in the U.S. economy, market competition decides prices and quality of goods and services. However, this is not the case when it comes to the health care system. Health care in the U.S. flows through an extensive regulatory framework at both the federal and state levels of government, developed over decades, and further distorted by our third party payer system.

One clear example of a regulatory barrier to competition in health care is Maine’s Certificate of Need (CON) law. CON injects a bureaucratic approval process in the path of health care investment. This distorts provider responses to consumer demand and restricts access to health care services. It also dampens competition, which further exacerbates the rising cost of health care products and services.

The Maine CON law protects incumbents and inhibits innovation. As a result, Maine’s average individual health insurance premiums are 31 percent higher than the national average. Government intrusion, such as Maine’s CON law, completely undermines market forces to the detriment of Maine’s healthcare consumers.

Please join us this month at our Maine Prosperity Events to learn more and to take steps to unshackle our health care system and restore competition and innovation.

Portland
● 12:00 p.m. to 1:30 p.m. ●
Tuesday, September 17, 2013
DiMillo’s On the Water
25 Long Wharf

Brewer
● 5:30 p.m. to 7:00 p.m. ●
Wednesday, September 18, 2013
Schooners Seafood & Steakhouse
5 South Main Street

For more information, please contact Ms. Kate Clark at kclark@mainepolicy.org or 207-321-2550.