Image vs. Reality: Mercatus, CON and Statistics in Search of Meaning

Executive Summary

Medical imaging has become the latest battlefield for economic theorists who mistakenly believe that the U.S. healthcare system is a typical marketplace in need of deregulation. Critics are now claiming that Certificate of Need laws (CON) have restricted access to imaging services, resulting in the need for patients to cross state lines.

Although the latest report is presented as a serious academic study, closer examination reveals a reveals a thinly veiled ideological attack on a regulatory framework that supports state efforts to manage cost and ensure adequate access to healthcare services for all citizens.

Among our major findings:

• Higher utilization of medical imaging is a dubious goal. More customers getting more scans might be good for a provider’s bottom line, but there are no clear medical benefits for patients and very clear economic costs for the system as a whole. Small wonder, then, that physicians without a financial incentive are recommending fewer scans—not more.
• There is absolutely no proof that CON laws are restricting access to services. As a tool for measuring access, cross-border migration is a blunt instrument based on torturous logic. More direct measures, like available capacity, show no shortage of access.
• Imaging equipment in a hospital setting has about 10 times the productive output of a non-hospital setting. Due to their productivity, hospital providers can offer greater access to patients without unnecessary and redundant capital outlays.
• Factual data refute the theoretical expectation of “higher costs, a smaller selection of services, [and] lower access to care” in CON states. Because North Carolina is generally regarded to have one of the strongest CON laws in the country, the study’s premise would indicate there should be significant access issues across the Tar Heel State—but an examination of the statistics shows that just the opposite is true.

In this paper, imaging services examined include Magnetic Resonance Imaging (MRI), Computed Tomography (CT), and Positron Emission Tomography (PET).

The full, 22-page report is freely available in PDF form. Please click here to download.