This week the Maine Department of Health and Human Services (DHHS) denied capital improvement projects at three Maine hospitals, according the Portland Press Herald. Maine has one of the strictest Certificate of Need laws in the country, requiring bureaucratic approval of many privately-financed hospital expansions and improvements.

In 2004, the Federal Trade Commission stated that "The Agencies believe that, on balance, CON programs are not successful in containing health care costs, and that they pose serious anticompetitive risks that usually outweigh their purported economic benefits. Market incumbents can too easily use CON procedures to forestall competitors from entering an incumbent’s market....Indeed, there is considerable evidence that CON programs can actually increase prices by fostering anticompetitive barriers to entry."

As Eastern Europe and other US states have abandoned the proven failure of central planning, Maine clings to this failed and costly strategy. What is most sad is that CON hurts patients - by driving up costs through reduced competition from new and innovative health care providers and by denying patients new technologies and treatments.

In model health reform legislation (PDF) released last summer, the Maine Heritage Policy Center recommends that Maine's CON laws be repealed. Health care costs will be reduced from the enthusing competition among current and new health care providers.

Maine DHHS cited increased private health insurance costs as partial justification of denying these projects. Oddly, the Governor and a majority of the Legislature had no problem on April 15 passing a new 1.8 percent claims tax on all private health insurance claims, increasing costs of health premiums by $61 for the average employee with single coverage and $162 for those with family coverage.