by THOMAS KIMBRELL || A recent report ranks South Carolina as the third worst state to have a baby. The Palmetto State ranks 40th for infant mortality rate, 45th for number of midwives and OB-GYNs per capita, 28th for cost of hospital Cesarian delivery, and 25th for cost of hospital conventional delivery charges. The March of Dimes classifies eight counties in South Carolina as maternity care deserts and lists 13 more as having low access to maternity care.
A key driver of the problem is government red tape that creates artificial shortages for hospitals, obstetrics services, perinatal services, and intensive neonatal care. These shortages stem from the state’s certificate of need law, which empowers government bureaucrats, rather than the market, to decide whether new health care services are needed and can have dire consequences for the health of mothers and babies.
South Carolina’s State Health Plan is the regulatory document that uses arbitrary formulas to determine the “need” for health care in the state. Health care providers cannot apply to offer a service if the plan doesn’t establish a need for that service. Its analysis of the need for neonatal intensive care bassinets is just one example of how the certificate of need regime creates dangerous, artificial shortages of vital health care services.
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The State Health Plan determined the need for neonatal intensive care bassinets is less than the neonatal mortality rate. According to the Department of Health and Environmental Control (DHEC), the neonatal mortality rate in South Carolina is 4.5 deaths per 1,000 live births. Shockingly, DHEC calculates the need for neonatal intensive care at a rate of 3.25 bassinets per 1,000 live births.
The disparity is even more significant in minority communities. The infant mortality rate among non-white mothers is 7.5 deaths per 1,000 live births — 2.3 times greater than the DHEC need calculation.
It gets worse: 94.5 infants per 1,000 live births are admitted to neonatal intensive care units (NICU). That means the actual NICU utilization rate is 30 times greater than the state-determined rate used to calculate the need for NICU beds.
An examination of the State Health Plan reveals that intensive care bassinets utilization rates are near or exceed 100 percent in three of the five perinatal care regions. Indeed, the State Health Plan admits to “high utilization” and “overcrowding” of intensive and intermediate care bassinets in some areas of the state. Still, their solution is not to adequately add bassinets but to transfer infants between facilities.
DHEC regulates neonatal services under the certificate of need law, which requires health care providers to gain approval from the state before opening new facilities, expanding services, or upgrading equipment—including installing intensive care bassinets.
Last year, my organization, Americans for Prosperity Foundation, published a report analyzing certificate of need applications submitted to DHEC from January 2018 to February 2021. The report found more than $450 million in health care investment was denied, withdrawn, or stuck in an appeals process.
South Carolina’s certificate of need regime pits providers against each other to fight for government favor. Even after DHEC approves an application, competing providers can appeal DHEC’s decision and then litigate the issue. These legal challenges can delay the provision of much-needed health care facilities and services by decades.
For example, the state identified a need for a hospital in York County in 2004. However, legal wrangling in the state’s courts over who should be granted the certificate of need dragged on for 15 years. At long last, Piedmont Medical Center in Fort Mill is scheduled to open this fall (and will include obstetrics services), 18 years after the state determined there was a need for it.
Currently, two approved certificates of need for intensive care bassinets are stuck in appeals. Summerville Medical Center and the Medical University of South Carolina each applied to add six intensive care bassinets. Last year, DHEC approved both applications; however, both facilities filed legal challenges opposing DHEC’s decision to approve the other’s application. Meanwhile, parents who desperately need care for their babies wait in the lurch.
South Carolina’s certificate of need program fails to contain costs, ensure access, and improve the quality of health care. The NICU bassinet need-determination, especially, is an unnecessary policy failure that jeopardizes the lives and health of mothers and infants and drives up medical costs.
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ABOUT THE AUTHOR …
Thomas Kimbrell is an analyst at Americans for Prosperity Foundation. Candace Carroll is the State Director for Americans for Prosperity Foundation – South Carolina.
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