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Brooklyn Law Review

Devon Allgood

Abstract

Certificate of Need (CON) laws are designed to lower the cost of healthcare and have been a staple of American law for over half a century. In the most basic sense, CON laws require that medical providers receive the government’s permission to build a new healthcare facility, purchase major medical equipment, add or remove services, and in some cases, change their hours of operation. These requirements are designed to lower the price of healthcare by limiting competition and barring providers from investing in services or equipment that are deemed “unnecessary” by the government, thus preventing these providers from passing the cost of expensive and unused medical equipment to patients. In practice, however, CON laws have increased the cost of healthcare while simultaneously limiting the public’s access to it. New York was the first state to adopt a CON law regime, and to this day has the strictest CON law in the nation. For New Yorkers, the state’s CON law has not only increased costs and decreased access to healthcare services, but the law also effectively hamstrung New York’s ability to adequately deal with the initial waves of the COVID-19 pandemic. Typically, such anticompetitive conduct would be disallowed by antitrust law. Though, because CON laws are government regulations rather than private actions, they enjoy blanket immunity from antitrust scrutiny via the Parker immunity doctrine, despite the clear harm these laws cause consumers. This note calls for the elimination of the Parker antitrust immunity doctrine, arguing that it should be replaced with a rule of reason analytical framework that balances the anticompetitive effects of the law with the legitimate interests of the state, regardless of its status as a government regulation.

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