Some Michigan citizens face significant mental health challenges, and it is likely only getting worse following the COVID-19 pandemic. Over the last several decades, Michigan has transitioned individuals with mental illnesses out of state hospitals and into community-based inpatient facilities. While this makes treatment and the location of services more convenient for families, the total number of community-based inpatient psychiatric beds has fallen by nearly 30% for adults and over 60% for children over the same time. This shortage means that patients with mental illnesses may not receive care when they need it and require longer waits in emergency rooms or, in some cases, even jail cells.
At least part of the reason for this shortage is the result of Michigan’s Certificate of Need law, which requires state approval to open or expand health-related facilities and services. So in Michigan, unlike neighboring states, a state-appointed council — which can include representatives from existing hospitals — determines the need for crucial mental health services, not patient demand through numerous market forces.
Additionally, the CON Commission only calculates the “need” of psychiatric beds every other year. Without CON laws, forecasts would be happening in real-time based on the demand in each facility and each community. In places where there are incredible shortages, new facilities and providers could come in with less delay.
Decades of research has found that CON laws reduce access to care, decrease health care quality, and increase costs. Early in the COVID-19 crisis, Gov. Gretchen Whitmer recognized this by suspending various CON restrictions through executive order. Left- and right-leaning groups, the American Medical Association, the Federal Trade Commission, and the Department of Justice recognize the harmful effects of CON laws and have called for their abolishment. Thus far, 12 states have completely repealed their CON laws, and another two dozen or so have fewer CON regulations than Michigan.
Eliminating Michigan’s CON restrictions on psychiatric beds is key to addressing our mental health challenges. While health care services are highly regulated, they are not immune to the laws of economics, namely that competition among firms improves the quality of services and reduces prices for consumers. Michigan’s CON law prevents medical facilities from adding psychiatric beds as needed, leading to negative health effects for people who need help.
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