Another win for South Carolina! For over 20 years, our state legislators have been trying to roll back the Certificate of Need (CoN) regulations that were enacted in the 1970s.
I was a co-sponsor of S.290 State Health Facility Licensure Act in the 124th General Assembly 2021-22. S. 290 was passed by the S.C. Senate by a roll call vote of 35-6 on Jan. 25, 2022, and the S.C. House introduced it on Jan. 26, 2022. It was further referred to the House Committee on Ways and Means and eventually “died in committee.”
S.164 State Health Facility Licensure Act was pre-filed on Nov. 30, 2022, by its primary sponsors — myself and Sens. Wes Climer, Josh Kimbrell, Sandy Senn, Dwight Loftis, Harvey Peeler, Larry Grooms, Billy Garrett, Chip Campsen, Ross Turner and Tom Davis. It was officially introduced in the 125th General Assembly 2023-24 on Jan. 10, 2023.
In February, the S.C. Senate approved the complete repeal of CoN by a 30-6 vote. Our S.C. House passed S.164 unanimously, 118-0, on May 2. In a final roll call vote of 43-0 in the S.C. Senate, we passed S.164 last night (May 3).
According to the S.C. Department of Health and Environmental Control, the CoN program was supposed to have promoted “cost containment and prevent unnecessary duplication of healthcare facilities and services.”
It’s hard to imagine that any hospital would have to ask permission from state officials to add beds/medical equipment or to build a new facility.
As a result of an extensive appeals process, these requests could drag on for many years, costing time and unnecessary money. In fact, one new hospital construction was held back for more than a decade by state health-care regulators.
During the COVID-19 pandemic, these laws were temporarily lifted, and South Carolina was not negatively affected.
Our state has been a national leader for medical service restrictions, with over 20 limiting laws just on that one topic alone. According to a Mercatus Center Study, our residents would have access to 34 additional hospitals, including nine rural installations.
For the states that repealed CoN requirements, there were concerns that there would be too many providers and not enough patients. The opposite is true for our state with numerous “healthcare shortage areas.”
What is the advantage to intentionally limiting clinics, equipment, hospital beds and other services?
CoN laws hurt health-care markets and disallow growth. They also encourage lawsuits among hospitals and others. Furthermore, and, more importantly for District 27, CoN laws have been proven to be correlated with decreases in rural access.
Here are some examples of delays of needed health-care capital projects caused by CoN (as shared by Palmetto Promise):
• Roper St. Francis Berkeley was delayed 11 years until it began seeing patients in 2019. The region has grown by 115,000 people 2010-20. Since 2010, Berkeley County has grown 33% and Dorchester County 20%.
• Piedmont Medical Center Fort Mill opened in September 2022, 20 years after it filed its first CoN application. Fort Mill’s population has tripled since 2000 and unincorporated areas like Baxter and Indian Land have grown at an even higher rate. York and Lancaster counties grew by 77,000 people from 2010-20.
• MUSC Indian Land’s application No. 2792 was accepted June 26, 2020. It has been appealed by competitors, so the project is on hold.
• Horry County’s population has grown by 400% since 1970 — 73,000 people in the last 10 years alone. Yet over $400 million in needed facilities for Horry County are currently contested by other providers in the county.
Currently, a total of $725 million in investment is stranded in the booming counties of Berkeley, Beaufort, Horry and Lancaster. All of these delays affect rural areas, as well as urban. All these delays mean higher construction costs and already too small facilities when construction begins.
The S.C. House only made one change to S. 164, and the S.C. Senate concurred. New hospital builds are still required to go through the CoN process until January 2027. All Certificate of Need laws, with the exception of longterm facilities, will be repealed immediately once the bill is ratified and signed by Gov. Henry McMaster.
This bill is good for South Carolina!
How does S.164 help my county? We shall have better access to medical care, more medical care options, and more affordable medical care.
I agree with Candace Carroll, state director for Americans for Prosperity: this is a “watershed moment” in health care.
This crucial legislation will directly benefit all communities, especially ours, and presents a true turning point for relief for patients everywhere.
Republican Penry Gustafson represents District 27 (Chesterfield, Kershaw and Lancaster counties) in the S.C. Senate.
