Health Care

The Banality of Red Tape: North Carolina Hospitals Barred From Buying PET Scanners


Michael Wilson

PET scanners are pretty cool. They give a 3-dimensional glimpse of the body's internal processes, allowing physicians to diagnose and observe the progress of health conditions like cancer, heart disease, epilepsy, and Alzheimer's. Hospitals are known for wanting to diagnose such things, so it's not uncommon for them to purchase PET scanners.

But 19 states and the District of Columbia require health providers to seek permission from state bureaucrats before buying a PET scanner. Obtaining this permission can take years and cost hundreds of thousands of dollars in application and attorney's fees—to say nothing of opportunity cost. After all that time and expense, there is no guarantee that permission, in the form of a "certificate of need," will be forthcoming.

North Carolina is one such state that forces health providers to submit to this kind of micromanagement. In May, two Winston-Salem-based hospital systems filed PET scanner applications. Wake Forest Baptist Medical Center already owns a scanner and uses it for medical research—and needs permission to convert it to clinical use. Novant Health meanwhile wants to build a new cancer center. Applications denied.

From the Triad Business Journal:

The state Division of Health Services Regulation rejected both proposals, saying that while both properly identified the areas that could benefit from the new scanner, there was not sufficient need to justify the cost of either proposal.

The purchase of PET scanners and other high-dollar diagnostic and treatment equipment is governed by the state's certificate of need law, which is designed to reduce the duplication of expensive medical equipment in an attempt to control health care costs.

The law may be intended to reduce costs. But does it? The evidence suggests it does not. Many states have repealed their certificate-of-need laws, but health expenditures have not skyrocketed in those states, as certificate-of-need proponents predicted.

Certificate-of-need rules do, however, keep regulators busy. Each year, North Carolina health planners produce a state health plan that purports to assess the need for PET scans, among other services. This year, the planners divined that the Winston-Salem area needed one more scanner, hence the two applications.

Novant and Wake Forest Baptist each argued that the other didn't really need a PET scanner. Apparently, they were both so convincing that neither application was accepted. If they were located in any of the over 30 states that do not restrict the purchase of PET scanners, the two hospitals could focus on competing for customers instead of competing for state favors. Alas, freedom does not reign in North Carolina.   

Both providers may appeal the decision, but neither has indicated if it plans to do so.

Click here for coverage of Virginia's certificate-of-need program, which limits access to CT scanners and potentially lifesaving innovation.

Related vid about certificates of need: "Treat Me Like a Dog: What Human Health Care Can Learn from Pet Care:

NEXT: Skip the Sunday Yak Shows and Watch Virginia Postrel Talk About Glamour!

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Comeon dude lets roll with it OK.

    1. No, this certification will not stand, man!

  2. Thinking that stopping more than one hospital from buying a piece of equipment will contain health care costs is like thinking that stopping more than one person in a town from buying tools that can repair cars will contain car repair costs.

    All bureaucrats should fucking hang.

    1. Hanging is too quick for these assholes.

      Congratulations government, you’re actively holding back medical advancement and denying diagnostic tools that could actually save lives.

      1. Hanging is fine, if it’s gibbeting. Birds gotta eat.

      2. Congratulations government, you’re actively holding back medical advancement and denying diagnostic tools that could actually save lives.

        But if the government doesn’t kill people, who will?

    2. All bureaucrats should fucking hang.

      Let’s not let off the hook so easily, the crony scum that went to them in the first place, in order to hamstring their competitors.

      There’s plenty of rope to go around.

    3. That’d have a plausible argument if auto repair worked with most people having insurance and the billing on a cost-plus basis.

      1. Most auto body work is billed to insurance, along with a pretty big junk of auto glass work.

        So if your counter to me was valid, it should be true that we could contain the cost of auto body work and auto glass work if we granted monopolies in those types of work on a county or state-wide basis.

  3. “…19 states and the District of Columbia require health providers to seek permission from state bureaucrats before buying a PET scanner.”

    This is why I cant function in many parts of society. If some fucknut bean counter told me I had to have permission to buy equipment for my business he would soon need a pet scanner himself. Certificate of need? Who came up with this shit?

    1. I know that the question was probably rhetorical, but they are called “CON laws” for a reason…

    2. Who do you think? The guys who already own PET scanners of course.

      The reality is someone (likely an insurance company) did a study and found that if a group of doctors formed a partnership and bought and expensive piece of equipment they were much more likely to order a test using said expensive equipment. And since the tests were being paid for by the insurance industry, they raised hell. Never mind if it actually was found to be useful, just that the tests were more likely to be ordered.

      Better to keep tests rare and limited, so that they only go to the most worthy of patients.

      1. This reminds me, another thing that politicians could do to drive down the cost of medical services (also known as “health care costs”) would be to ban the use of health insurance to pay for medical services.

        1. Just ban health care.

          Television didn’t cost anything in 1632.

          1. That’s crazy talk (about the TV). How did politicians get people to vote for them? I think you’re promoting a conspiracy theory.

            1. “If you like your king you can keep your king!”

              1. (Oliver Cromwell’s TV address to his constituents)

      2. Fucktastic laws like CON were designed to control costs for insurance companies, not consumers. Tell a ‘crat, a legislator, or an insurance executive that they don’t work and keep things like PET scans relatively rare and expensive and no shits will be given.

        If there were a bunch of PET scanners around, the price per scan would probably drop low enough that many people could pay out-of-pocket. Can’t have that shit. We’ll TELL you what you need, citizens.

    3. Yep. “Certificate of need” is one of those things that drives me up the wall.

      Fuck off, slavers!

    4. But regulation doesn’t impede the human condition, it only helps to eliminate market failures. Tony told me so.

    5. This is always the first thing I bring up when people question me about free-market healthcare reform. 9 out of 10 people I talk to about this accuse of making it up. Then I point them to, and for a brief second I see a glimmer of understanding only to be snuffed out by “Well if government is doing it, it must be necessary.” And then I cry a little inside.

      My sadness is then replaced by the fury of thousand burning suns as I long for the day when the government finally pisses them off. Then I will break out Martin Niem?ller’s First They Came…. For those not familiar with Niem?ller there is always South Park: “The tears of unfathomable sadness. Yummy! Yummy, you guys.”

  4. The Massachusetts of the South strikes again.

  5. If politicians really wanted to drive down health care costs, they would get rid of “certificates of need” and doctor licensing.

    1. That they have not is telling.

  6. Almost forgot: MARKET FAILURE!

  7. Incompetence replaces corruption at the IRS department responsible for tax-exempt organizations.

    “Most of the senior IRS officials who worked in the unit have either retired or been pushed out as a result of the May Tea Party scandal, said Marc Owens, a partner with Caplin & Drysdale…. “Everyone from the commissioner down to the director of rulings and agreements in the exempt organizations function were replaced by people with essentially no tax administration experience,” he said. “No experience interpreting the Internal Revenue Code, no experience dealing with taxpayers that apply the code, no experience in doing what the exempt organizations function has done and is in charge of doing.””


    1. They’re batting .500 then, at least for a government agency: Incompetence usually supplements corruption.

    2. you make incompetence and corruption seem like an either/or thing. Come on, now; it takes both to truly define bureaucracy.

  8. In 2009, Rep. Tom Price asked an administration official about Obama’s “if you like it you can keep it” promise, got evasive answers.

    An we’re just hearing about this now!…..le/2539266

  9. reduce the duplication of expensive medical equipment in an attempt to control health care costs.

    Control health care costs… by keeping them high? How do these idiots not understand that more PET scannners = lower consumer cost per scan?

    And these are the morons that try to run my state.

    1. “Fucking supply curves, how do they slope?”

      1. In a price-controlled system such as we have – it doesn’t matter.

        1. You don’t fix a broken system by doing the exact opposite of what would actually reduce prices in either case.

    2. I such a fully regulated system as we have this is not actually true. The argument goes like this “if insurance will pay $X for a CT scan and every doctor spends millions of dollars to buy a scanner then every doctor has to do a certain # of CT scans at $X per scan to pay for their scanner.” What they are afraid of is that there will be a skyrocketing number of scans which then lead to other procedures. This of course happens because the price of each scan is essentially fixed by Medicare. The whole edifice has to be dismantled.

      1. “if insurance will pay $X for a CT scan and every doctor spends millions of dollars to buy a scanner then every doctor has to do a certain # of CT scans at $X per scan to pay for their scanner.”

        You’re looking at this completely wrong.

        Nobody’s going to pay 1.6mil for a scanner if they don’t think they can get the money out of doing scans.

        A hospital/company that does want to buy/convert a machine will justify the expense (to itself) by how many scans it currently sublets and how long it will take to recoup its investment.

        You don’t take out a 1.6 million dollar loan and then just start selling scans because “that’s what insurance will pay.” You do it so that you can make the profit off the scans instead of whoever you’re currently paying to do your scans; and, hopefully, get more business by offering a better price on the scans since you don’t have to sublet it.

        Your fundamental misunderstanding of economics is astounding, and it’s precisely the reason our politicians and bureaucrats think exactly the way they do.

  10. OT (from Facebook):

    If you could pull cars into existence just by thinking about them, would you be angry if someone took your present vehicle?

    1. More evidence that the facebook turns your mind into mush.

  11. “If you like your current PET scanner, you can keep it.”

    Just don’t ask for a new one.

  12. only a bureaucrat could say, and with a straight face, that having less of something, i.e. less competition, helps to control costs.

    1. Only a bureaucrat could say that and actually believe it. Because regulations and stuff.

  13. “12 Reasons Why Obama Is One of the Best Presidents Ever

    “With tears in my eyes, and joy in my heart, I stood alongside people of color across the nation as we celebrated America’s first inauguration of a black president. As a young black man, I felt a true sense of patriotism…

    “…While I acknowledge he has made a number of mistakes in recent years, I stand firm in my conviction that Barack Obama is one of the greatest presidents America has ever seen. I believe history will prove this, and with time, he will be remembered in the annals of history as a revered revolutionary.

    “Here are 12 reasons why Obama is one of the best presidents ever:

    “1. He is for The People….

    “2. He is for civil rights….

    “3. He is for one race -the human race….

    “4. He is for a healthcare system that brings hope and healing to the hurting….

    “5. He is for the middle class….

    “6. He is for women’s rights….

    “7. He is for doing away with pomp and circumstance….

    “8. He is for the environment….

    “9. He is for veterans….

    “10. He is for peace….

    “11. He is for education….

    “He is for entertaining the masses….

    “If these 12 reasons aren’t enough to convince that president Obama is one of the best presidents ever, then you are not thinking objectively!”…..80675.html

    1. VivaTallahassee
      48 Fans
      People, people…allow me

      “He is for The People…He is for civil rights.”
      —–HA! Need I say NSA, PATRIOT USA Act, (yeah we all know Bush started it, but Obama reauthorized it)

      “He is for a healthcare system…Obama’s healthcare plan has allowed uninsured Americans to reap the benefits of a universal healthcare system”
      —– If that was the case, we would have SINGLE PAYER!

      “He is for the middle class”
      —– Last I checked the middle classes’ wages are the same while his big bank donors rake in all time high profits.

      “He is for the environment.”
      —- BP Oil Spill? Did any execs go to jail for gross negligence, intentional destroying of evidence that proved they knew the rig was unstable? No And I guarantee he will approve the Keystone Pipeline.

      “He is for peace.”
      —– He was ready to invade Syria by using one of the same reasons Bush did for Iraq.

      “He is for veterans.”
      —– The VA is backlogged beyond comprehension. “Thank you” and a pat on the back doesn’t keep the lights on pal.

      Face it. Obama is not the President he promised to be in 2008.
      16 NOV 8:34 PM

      1. “He is for The People. Say what you will about Barack Obama, but unlike the many presidents who preceded him, he cares about what is best for the greater good. He truly does represent The People. His actions have always been motivated by a sincere desire to do what is best for the majority, even if it meant losing ground with the wealthy, influential or powerful minority.”


        1. You could say that about the stereotypical communist, too.

          1. That’s why I’m laughing; because what he sees as virtue I would see as the problem.

        2. His actions have always been motivated by a sincere desire to do what is best for the majority,

          So were Jim Crow laws.

      2. Best comment: “Have you ever considered writing for The Onion?”

    2. I would say he was trolling, but the Doctorate in Education indicates otherwise.

    3. objectively

      That word doesn’t mean what he thinks it means.

      1. Doctorate in Education, ’nuff said

    4. I’m reaching the point of giving up and joining the Borg. I’ll get a job with some bureaucracy, and do whatever I can to screw with people’s lives, because I freaking hate people anymore for their complicity in effecting the current situation.

      1. The safest place to be in the Soviet Union or NAZI Germany was working as a low – mid level bureaucrat.

    5. I’m getting the impression that these fanboys would move to Guyana if Obama asked them.

      1. We should get him to ask them.

    6. I thought this was another one of those 2008 pieces reposted for us to laugh at in hindsight.

      Nope. Published on Friday. What the fuck.

      1. I thought it was an article from The Onion. There is literally nothing substantive in that list that one can point to as demonstration of a tangible positive contribution that Pres. Obama has made to the nation.

        1. If President Obama declared that, for the rest of his term, he would do absolutely nothing- no executive orders, no press conferences, no declaring a law changed by sheer force of utterance- but his expected Constitutional functions, he could maybe avoid being the worst president ever. Maybe.

          That fella’s glazed-eyed afterglow is frightening for its doltish vacuity. The prez has done the opposite of most of what Dr. Education wrote. Peace? Veterans? Middle class? Are you shitting me?

    7. But I like pomp and circumstance!

      1. If you like your Elgar, you can keep it.

        1. I’ve always found it humorous that the ultimate paean to British imperialism is our official graduation song.

          1. In grade school, I assumed that it was deliberate.

            I still do.

    8. -He is for civil rights….

      Even if we define ‘civil rights’ in the narrow sense many liberals do, in other words ‘equal protection rights,’ Obama is terrible. Is there anyone who could deny that currently the most damaging policy which disproportionately falls on blacks is the War on Drugs? Obama has expended none of his early political capital in correcting this. Indeed, he has rather publicly backed continuing criminalization at a time when legalization has more momentum than ever. He has cracked down on marijuana sellers in states that have legalized it. And he has used his pardon power to address the matter less than any recent President.

      Tears in your eyes? Yes, but not for the reason he gives.

    9. “He is for entertaining the masses….

      This guy thinks Obama is a great president because of bread and circuses.

      I find this hilarious.

      1. Maybe that’s why we had all the scandals, malfeasance, and incompetence. To entertain us! Why didn’t I see that before?

  14. Pelosibot random phrase generator is on Meet the Press.

    “Don’t worry. Everything is under control. The people love us. We’re dedicated to growing the economy. That quote was taken out of conntext.”

    1. Is she the worst of all of them? I think she has to be, she’s truly repugnant

      1. She’s more repugnant but morons like Gillibrand are worse.

    2. Sometimes I wonder if politicians get “clich? coaching,” like in Bull Durham.

  15. On NPR, a Chinese-American writer talks about handing out fortune cookies in Beijing. They’d be surprised when they bit into their cookie and tasted, ick!, some paper.

    1. No surprise there. Fortune cookies are American inventions.

      1. She said it was invented by Japanese immigrants, and Chinese immigrants took it up.

          1. I LOVE this. Thank you

            1. Thank you for getting it. And being an American.

    2. On NPR, a Chinese-American…

      “Oriental” is the preferred nomenclature, dude.

  16. Let’s talk about the President’s Legacy, next.

    Oh, goody.

    1. Brooks, have you ever considered engaging the services of a dominatrix, for this self-inflicted kink of yours to be made miserable?

  17. So, it pollutes less than “fossil fuels”, it’s relatively safe, and can run for a century before needing to be refueled? Well, it sounds good, but do you have a certificate of need?

  18. We should start calling CCWs “certificates of need.”

    1. +1 violent rhetoric

  19. Brooks, have you ever considered engaging the services of a dominatrix, for this self-inflicted kink of yours to be made miserable?

    Oh, come on. What could be more fun than listening to Chrissie Matthews’ slobbery devotion to Presidents Who Get Things Done? He’s like a girl in one of those grainy black and white Beatles concert films, squealing and sobbing and wetting his pants. I just want to be there when he swan dives from the balcony.

  20. Elizabeth Warren is a warm and empathetic human being, and she makes you feel like the most important person in the room. Sounds like a used car salesman. Or a mass murderer.

  21. Kristen Gillibrand is on ABC. Holy shit, calm down, you jabbering ninny.

    1. Ha ha,

      we posted the same thing about her at the same time.

  22. Senator Gillibrand is on This Week

    What a fucking moron.

  23. For some reason, I assume her campaign brain trust plastered her cute face all over place, while keeping her far, far away from any microphones.

    1. Remember, when she ran for office she got to run against a New Yorker.

      And that Peter King is a pretty typical Republican New Yorker.

  24. OT

    Has anyone noticed the latent racism in the Obamacare – Got Insurance ads?

    20 ads – most are goofy white kids being asses, then there’s the single mom – who appears hispanic; the pregnant woman – also hispanic; and the black boy holding a large knife about to cut himself – only black male in the ads.

      1. Not to go all proggie grievance monger but,

        the ads depict a total of

        20 white females

        11 white males

        3 Hispanics females

        2 race ambiguous (one male – one female)

        2 cardboard white males

        1 black female

        1 black male

        Someone alert the SPLC

        1. Well, you market to your audience. Blacks and Latinos are already on the bandwagon.

          Compare, for example, recent outreach attempts to Blacks by the Tea Party*.

          *Yes, you read correctly, Koch Records.

          1. I’m thinking the Ocare ads will be about as effective as that vid, considering it’s had ~17,000 views in 4 years.

            1. Placing one’s scrotum in a woman’s mouth just isn’t a popular as it used to be.

              I blame House Hunters on HGTV.

    1. 20 ads – most are goofy white kids being asses, then there’s the single mom – who appears hispanic; the pregnant woman – also hispanic; and the black boy holding a large knife about to cut himself – only black male in the ads.

      That’s because everyone in the ads either works there or are friends or family of people who work there. I guarantee it.

      Non-profits and NGOs are thick with 20-something, do-gooder college educated white girls who have few marketable skills, hence, they go in to marketing and pimping for spending OPM.

  25. I had never seen Gillibrand before. Henceforth, I shall be unable to think of her as anything other than “Senator Sorority Girl”.

  26. Yes, Howard; the thing people are afraid of is Obamacare turning into a rampaging success. Also, explain these “tax subsidies” to me. Are you now saying the IRS will return more of your own money to you based on your income and level of coverage? That’s much more efficient than letting people just keep their money and spend it as they see fit.

    1. It’s amazing how they keep burrowing deeper and deeper into their bubble.

      2014 is going to be epic.

  27. Smell the Paternalism! WV SoCon Group Pushes Bill to Increase Marriage License Fees, but Give Discount if Couples Go Through Approved Pre-Marriage Counseling

    -The Premarital Education Act (PEA) seeks to reduce the risk of divorce, as well as the attendant economic impact, by creating an incentive for couples to undergo premarital education and counseling.
    Through the PEA, marriage license fees are increased from $35 to $70. Marriage license applicants have the option of undergoing eight (8) hours of premarital education. With a certification that they have undergone the requisite counseling, the county clerk is empowered to waive $35 of the marriage license fee.

    Recognizing that not everyone will undertake premarital education, the increase in marriage license fees serves two purposes. First, it discourages marriages entered into with haste and lack of forethought that statistically lack staying power. Second, it funds the Marriage Education Trust Fund (also created in the PEA) that the Executive is authorized to administer with programs that encourage strong marriages in West Virginia.…..rce-reform

    Paternalism, the creation of a slush fund for the Executive, and stimulus for pastors and social workers, all bases covered.

    1. I think SoCons would want to replace the marriage license fee with a gift card to Wendy’s or Warlmart.

    2. I’ve got a better idea.

      When people show up with their certificate looking for the $35 discount, we have Navy Seal ninjas jump out of the duct work and seize them.

      We then tell them that we no longer allow people who think their time is only worth $2.19 an hour to marry or breed.

      We then mercy kill them on the spot.

    3. How about, instead of complaining when some SoCon raises the cost of a government permission we just get rid of the government permission?

      I mean, you *already* have to ask permission to get married – now we’re just quibbling on the price of that permission.

      1. Blue Tulpa is not amused by your cutting of the Gordian knot.

  28. Arizona, of course, does not have this CON crap,

    Strangely enough though – CA doesn’t require it either. I guess they’ve not *completely* gone down the permission-hole yet.

    1. CA is better than a lot of state in many aspects.

  29. The law may be intended to reduce costs. But does it? The evidence suggests it does not.

    The PS4 sold like 1 million units in 24 hours. In 18 months does anyone think the price of PS4s will go up when the installed base in 10 million units? Does anyone put the likelihood of the price going down in that time period below 50%?

    The complete economic ignorance of this law is astounding.

    1. This just in: politicians know nothing about economics. Just like they know nothing about health care. They know getting elected and doing things once they are elected which will make it look like they’re fulfilling the extravagant promises they made.

  30. The 14 states with no CON laws:

    Arizona (repealed 1985)
    California (repealed 1987)
    Colorado (repealed 1987)
    Idaho (repealed 1983)
    Indiana (repealed 1999)
    Kansas (repealed 1985)
    Minnesota (repealed 1985)
    New Mexico (repealed 1983)
    North Dakota (repealed 1995)
    Pennsylvania (repealed 1996)
    South Dakota (repealed 1988)
    Texas (repealed 1985)
    Utah (repealed 1984)
    Wyoming (repealed 1989)

    The federal “Health Planning Resources Development Act” of 1974, which made funding available to states on the condition they have CON laws (and which was pushed largely by the American Hospital Association, which also pushed for state-level establishments), was repealed in 1987.

    1. Another progressive action by republican president Nixon.

Please to post comments

Comments are closed.