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Goldwater Institute Sues to Throw Out Georgia Law that Stopped Doctors from Expanding Surgery Practice

June 30, 2015

Atlanta—In a case with national implications for the cost and availability of health care, today two Georgia doctors filed a lawsuit to challenge an outdated law that makes it harder for doctors to expand their medical practices and buy new equipment like MRI and CT machines.

The “Certificate of Need” laws require doctors to apply to the Georgia Department of Community Health for permission before they can add space to serve more patients or buy some new medical equipment. But the Department allows health care providers who don’t want more competition to object to new applications. Thirty-six states and the District of Columbia have similar Certificate of Need laws in place.

The Goldwater Institute is representing Hugo Ribot and Malcolm Barfield, OB-GYN surgeons who own a surgery center, the Georgia Advanced Surgery Center for Women, in Cartersville, Georgia. Dr. Ribot and Dr. Barfield want to serve more patients by adding a second operating room and letting other surgeons use their facility on the days when they are busy delivering babies. When one of the doctors doesn’t have a surgery scheduled, the state-of-the-art facility goes unused. Having other surgeons use the surgery center when Dr. Ribot and Dr. Barfield are delivering babies would help cover the facility’s overhead costs and give more doctors and patients access to a surgery center close to home.

But the Georgia Department of Community Health turned down their application, saying that because the center isn’t used every day, there’s no need to allow other doctors to use the facility or add another operating room.

“The Georgia Department of Community Health is saying that because Dr. Ribot and Dr. Barfield can’t be in two places at once, women who need critical care, like those with ovarian cancer who need hysterectomies, will either have to wait or pay thousands more for the procedure at the hospital. That hurts real people who need access to affordable health care today,” said Jim Manley, an attorney from the Goldwater Institute who is representing the doctors.

The American Association of Gynecological Laparoscopists has designated the Georgia Advanced Surgery Center for Women as a “Center of Excellence,” one of only a few in the entire country, for its highly advanced surgical techniques, rigorous safety standards and commitment to outstanding patient outcomes. Since opening in 2010, they have performed hundreds of minimally invasive, outpatient procedures—all with same-day patient discharge and no instances of infection, wound complication or re-admission.

These outstanding outcomes are achieved at lower prices than hospitals charge. Studies have shown the ambulatory surgery centers like the Georgia Advanced Surgery Center for Women decrease Medicare costs because they are paid a fraction of what is paid to hospitals for the same services. On average, Medicare pays surgery centers 56{010c6536f15f83a69f09c4467fdfb4a5656804feab27fe0dec71ed1e80da306f} of the amount paid to hospitals for performing identical services. Between 2008 to 2011, surgery centers saved the Medicare program and its beneficiaries $7.5 billion. 

The Hospital Corporation of America, the largest hospital corporation in the country, opposed Georgia Advanced Surgery Center for Women’s Certificate of Need application. The Hospital Corporation of America owns Cartersville Medical Center, which is across the street from the Georgia Advanced Surgery Center for Women and competes with the Center for patients.

Certificate of Need laws were supported by the federal government in the 1970s as a way to reduce healthcare costs; but evidence demonstrated the laws did the opposite: they restricted access to care and raised costs. The federal government repealed its Certificate of Need requirement in 1986. The Department of Justice and Federal Trade Commission released a statement encouraging all states to repeal their certificate of need laws, calling them a “detriment” to patients.  

A recent study by the Mercatus Center at George Mason University confirmed that states with certificate of need laws have fewer hospital beds and MRI services, CT scanners, and optical and virtual colonoscopies per capita.

The total negative impact of the Certificate of Need law on health care in Georgia is unknowable. Dozens of applications were withdrawn from the Georgia Department of Community Health within the last three years, including applications for new CT and MRI machines. An application for a new nursing facility was denied. From 2011 to 2013, more than 20 percent of applications were either denied or withdrawn. And an untold number of applications never get filed due to the tremendous cost of applying.

Dr. Ribot and Dr. Barfield’s application cost $1,000 and required hiring a consultant who spent 200 hours and charged tens of thousands of dollars gathering the required information and submitting the application. After spending thousands of dollars and many hours of their time, the Georgia Department of Community Health denied their application in March 2015.

“Certificate of Need laws keep cost-saving, cutting-edge medical services from those who need them,” said Manley.  

Georgia lawmakers considered a bill this session to eliminate the Certificate of Need requirement, but the bill did not pass. 

The lawsuit challenges the Certificate of Need law on five separate constitutional grounds, including the state Constitution’s anti-monopoly clause and the federal Constitution’s equal protection guarantee, and asks Georgia courts to strike down the law.



About the Goldwater Institute

The Goldwater Institute drives results by working daily in courts, legislatures and communities to defend and strengthen the freedom guaranteed to all Americans in the constitutions of the United States and all 50 states. With the blessing of its namesake, the Goldwater Institute opened in 1988. Its early years focused on defending liberty in Barry Goldwater’s home state of Arizona. Today, the Goldwater Institute is a national leader for constitutionally limited government respected by the left and right for its adherence to principle and real world impact. No less a liberal icon than the New York Times calls the Goldwater Institute a “watchdog for conservative ideals” that plays an “outsize role” in American political life.



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