Image of nurses' hands at computer keyboard

Staff from the Federal Trade Commission have recommended Alaska repeal its certificate-of-need laws, which require healthcare providers to get state approval before they can expand by opening new locations, adding services or making some kinds of capital investment.

“CON laws, when first enacted, had the laudable goals of reducing health care costs and improving access to care,” the agency said in testimony presented to the Alaska Senate Committee on Labor & Commerce this week. “However, after considerable experience, it has become apparent that CON laws do not provide the benefits they originally promised. Worse, in operation, CON laws can undermine some of the very policy goals they were originally intended to advance.”

The staff testimony, like a 2017 Department of Justice statement in support of a repeal, was provided at the request of Alaska State Senator David Wilson.

The Commission said CON laws have not helped control costs, improve quality or increase access in the state. Instead, officials said, they create barriers to entry and expansion and may actually increase prices by limiting choice.

Independent researchers have said previously that ending nursing home certificate-of-need laws could spur innovation. Such laws were on the books in 34 states as of 2017.

On its own website describing the CON program, Alaska acknowledges it has a “vested interest in new healthcare construction projects and equipment purchases because of the large amount of money the state expends for Medicaid.”

Hospitals, nursing homes and psychiatric facilities all fall under the CON purview.

Demographic projections suggest that Alaskan healthcare services will have to expand to meet the needs of a growing population, including a much larger senior population, the website says.

“Circumstances mandate that new and expanded services be planned properly to get the highest quality and most appropriate services possible at the best price,” the state says.

The FTC has been increasingly focused on state laws that unnecessarily restrict competition and reducing regulation.