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Published online by Cambridge University Press: 20 January 2020
In her essay “Anti-Competition Regulation,” Anne Fleming explores the history and political economy of “certificates of public convenience.” For most regulation, repression of competition is an unfortunate side effect—something to be traded off for a safer, healthier, and more equal society. But for certificates of public convenience, repression of competition is itself the goal. Free competition can yield bad results, for consumers or firms (arguments emphasize one or the other depending on the ideology of the time). Certificates cut to the heart of the problem by limiting new entry into a market only when, as one early statute put it, new entry would “promote the convenience and advantage of the community.”
1 Gallert, David Jacque, Hilborn, Walter Stern, and May, Geoffrey, Small Loan Legislation: A History of the Regulation of the Business of Lending Small Sums (New York, 1932), 234CrossRefGoogle Scholar.
2 Stevenson, Charles R., The Way Out (New York, 1932), 26–27Google Scholar.
3 For a general discussion of healthcare certificates of need, see Ohlhuasen, Maureen K., “Certificate of Need Laws: A Prescription for Higher Costs,” Antitrust 30 (2015): 50–54Google Scholar.
4 For Alabama, for example, see Ala. Code of § 22-21-260 (1975); and “Certificate of Need Review,” State Health Planning and Development Agency, n.d., http://www.shpda.state.al.us/boards/conrblisting.aspx?sm=b_a. In Iowa, “each council member shall be a person who has demonstrated by prior activities an informed concern for the planning and delivery of health services”; see Iowa Code §135.62(2)(a) (2017); and Heiman, Chad A., “Shifting Purpose: Why Iowa's Certificate of Need Law Is a Form of Economic Protectionism for Certain Iowa Health Care Providers and Should Be Repealed,” Iowa Law Review 104 (2018): 396Google Scholar. In Tennessee, six of nine members are healthcare providers; see Tenn. Code Ann. § 68-11-1604 (2013); and “Board Members,” TN Health Services and Development Agency, n.d., https://www.tn.gov/hsda/hsda-board-members.html. For Illinois, see Wolfson, Lauretta Higgins, “State Regulation of Health Facility Planning: The Economic Theory and Political Realities of Certificates of Need,” DePaul Journal of Health Care Law 4, no. 2 (2001): 274–75Google Scholar. In Michigan, seven of ten members are healthcare providers; see Public Health Code, Mich. Comp. Laws Ann. § 333.22226 (2003); and “Commission Overview and Members,” Michigan Department of Health and Human Services, n.d., https://www.michigan.gov/mdhhs/0,5885,7-339-71551_2945_5106-35111--,00.html.
5 Prominent federal certificate programs include those implemented by the Federal Communications Commission (see Communications Act of 1934, Pub. L. 73-417, 48 Stat. 1064); the Interstate Commerce Commission (see John J. George, “Federal Motor Carrier Act of 1935,” Cornell Law Quarterly 21 [1936]: 235–36); the Civil Aeronautics Board (see Civil Aeronautics Act of 1938, Pub. L. No. 75-706, 52 Stat. 973); and the Federal Power Commission (later known as the Federal Energy Regulatory Commission; see Natural Gas Act of 1938, Pub. L. No. 75-688, 52 Stat. 821).
6 See Heiman, “Shifting Purpose,” 406–8. In Oregon, the division must contact similar facilities for comment; see Or. Rev. Stat. § 431.120 (2015); Or. Rev. Stat. § 442.315 (2019); and “Oregon Health Authority: Public Health Division – Chapter 333,” Oregon Secretary of State, n.d., https://secure.sos.state.or.us/oard/displayDivisionRules.action?selectedDivision=1379. In Mississippi, the department must contact all healthcare facilities for comment; see Health Care Certificate of Need Law of 1979, Miss. Code Ann. §§ 41-7-171–41-7-209; and Title 15 Mississippi State Department of Health, Part IX Office of Health Policy and Planning – Subpart 91 Planning and Resource Development, https://msdh.ms.gov/msdhsite/_static/resources/7167.pdf. Missouri has an analogous requirement for new moving companies—specifically, that the state's Department of Transportation contact incumbent moving companies and invite them to object to a new application. See Sandefur, Timothy, “CON Job: State ‘Certificate of Necessity’ Laws Protect Firms, Not Consumers,” Regulation 34, no. 2 (2011): 42Google Scholar.