by Connecticut has rising healthcare costs and Gov. Ned Lamont wants to help. But before moving forward with his proposed legislation, which he presented to the General Assembly in February, he was due to spend a night at the Copper Beech Inn in Essex.
Built in 1899, the property offers luxury accommodations and fine dining on 53 acres. Guests have enjoyed the inn for decades, but it wasn’t the first to arrive in the Connecticut River Valley. Less than three miles away is the Griswold Inn, which opened in 1776.
The added story gives the Griswold bragging rights but not the power to ban other hotels. State laws do not force newcomers to obtain approval from established innkeepers before opening on their territory. Griswold has no veto power to halt growth, allowing the hospitality market to thrive and evolve.
Healthcare is different. Term of office comes with privileges.
Protectionist laws already on the books require something called a confirmation of need, or “CON,” before anyone can build facilities, add beds, or purchase major medical equipment. Not only must CON applicants demonstrate to the state’s satisfaction that their services are needed, but they must also face challenges from potential competitors who may participate in the process and argue for rejection.
Simply put, a CON is a government permit that protects industry insiders from competition.
Instead of dismantling the rigged system, Lamont wants to expand it by adding tougher penalties for CON violators and higher fees for CON applications. Part of House Bill 6669, one of two proposed actions by the governor, would force CON applicants to reimburse the state for consulting fees when the government hires outside experts to review applications.
Lamont defends his plan with reverse logic. He suggests that more bureaucracy, higher start-up costs, and fewer choices for consumers would somehow help Connecticut families. “This will reduce healthcare costs by preventing duplication of effort in certain areas,” his office said in a press release.
Decades of research and practical experience show the opposite. The Antitrust Division of the US Department of Justice and the Federal Trade Commission sounded the alarm as early as 2008: “By their very nature, con laws create barriers to entry and expansion to the detriment of healthcare competition and consumers.”
If CON rules applied in other industries, the Griswold could have blocked Copper Beech and other nearby inns. The Hartford Courant, which published its first issue in 1764, could have blocked other newspapers. The Hartford Bank, which opened in 1792 and now trades as Shawmut National, could have blocked other financial institutions. And Louis’ Lunch, family-run in New Haven since 1895, could have blocked other restaurants.
These scenarios seem absurd, but the sabotage is actually taking place in healthcare. Connecticut issued a CON to Hartford HealthCare and Yale New Haven Health in 2022, allowing the joint venture partners to advance their plans to open the state’s first proton therapy center in Wallingford. But the state turned down a CON application from Danbury Proton to open a similar facility 45 miles away.
Hartford HealthCare and Yale New Haven, two of the state’s oldest and largest providers, were not neutral observers. They sent an agent to argue against Danbury Proton, who has been fighting for a CON for three years.
Lamont revealed the truth about CON laws in the early weeks of the COVID-19 pandemic. “Conning the Competition,” a statewide review of CON statutes by our public interest law firm, the Institute for Justice, finds that Connecticut and 23 other states enacted executive orders suspending CON enforcement in 2020, so healthcare providers can respond more quickly to the crisis.
If Connecticut wants to cut healthcare costs, it should take Lamont’s temporary order and make it permanent. Senate Bill 170 sponsored by Sen. Ryan Fazio, R-Greenwich, would do just that. If the measure passes, Connecticut would join New Hampshire, California, Texas and nine other states that repealed their CON laws entirely years ago.
A quick vacation to the Connecticut River Valley would show why more choice is better, not worse.
Jaimie Cavanaugh is an attorney and Daryl James is an author at the Institute for Justice in Arlington, Virginia.
