Doctor Fighting To Break Certificate of Need Barrier in North Carolina

The Institute for Justice partners with an independent eye doctor to challenge state regulations that protect hospital monopolies and restrict patient access.

Getting a medical appointment can take weeks or months in the United States, where big hospitals dominate local markets. Independent eye doctor Jay Singleton is trying to break up such a cartel in North Carolina, where he operates.

Singleton's case is urgent, but he has been stuck on a different type of waiting list for years. Instead of health care access, he's been fighting for court access. He had good news this month when the North Carolina Supreme Court revived his lawsuit against the state regulators who function as gatekeepers for the entire industry.

Certificate of need (CON) laws exist in various forms in 38 states and Washington, D.C. The stated goal of such laws is to keep costs down by preventing overinvestment in any single market. If regulators decide an area already has enough of any type of service, they can block new construction.

As a result, nobody in North Carolina can open or expand certain medical facilities without these regulators' permission. Even purchasing an MRI scanner without their approval can be illegal. These restrictions prohibit Singleton from using his own clinic in New Bern for most of the surgeries he performs. He must drive two miles up the road to a competitor's office, as it is owned by a major health care player. This unnecessary red tape increases costs and decreases scheduling options, and patients suffer.

Singleton has battled this scheme since he set up his clinic in 2024. Frustrated by a wall of bureaucracy and lack of progress, he sued in 2020 with representation from our public interest law firm, the Institute for Justice.

Getting to trial has not been easy. Wake County Superior Court tossed out his case in 2021 without discovery or witness testimony, and the North Carolina Court of Appeals upheld that decision in 2022. The state Supreme Court ruling simply allows Singleton to go back and try again.

Singleton is not alone in this struggle. The Iowa ophthalmologist Lee Birchansky fought for more than 20 years before state regulators relented and gave him permission to perform surgeries at his own clinic. In 2016, Virginia fended off a CON lawsuit from pulmonologist Mark Baumel and radiologist Mark Monteferrante. Kentucky spiked a home health care service that entrepreneur Dipendra Tiwari tried to launch in 2019. Connecticut blocked a cancer treatment center in 2022, clearing the way for political insiders to proceed unimpeded with their own cancer treatment center 45 miles east. None of these cases involved health or safety concerns.

CON laws work great for existing providers, who do not have to worry about rivals setting up shop and attracting patients with superior service. This also means existing providers can also take their doctors and nurses for granted, as CON laws keep rivals far away, limiting their ability to poach talent.

California, Texas, and 10 other states operate without CON laws. None of these states has experienced any measurable harm. In fact, multiple studies show benefits. For example, Matthew Mitchell, a researcher at George Mason University's Mercatus Center, says states that got rid of their CON laws have more hospitals and surgery centers per capita, along with more hospital beds, dialysis clinics, and hospice care facilities.

Lawmakers in other states have looked at the data and whittled away at CON protectionism in recent years. Arizona, Georgia, Indiana, Montana, Ohio, South Carolina, and West Virginia have all scaled back their CON laws.

North Carolina joined this list in 2023 with some CON reforms of its own. But the new rules do not help Singleton. He is still stuck on the outside looking in.

Far too often, big hospitals with political pull win at the expense of everyone else. Singleton is doing his part to end the monopolies. State lawmakers and the courts must do the rest.