WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) announced April 12 that it has recommended that Alaska repeal its certificate-of-need (CON) laws.

The laws mandate that providers of health care must obtain state approval before expanding, establishing new facilities or services, or making large capital expenditures.

“CON laws raise considerable competitive concerns and generally do not achieve their alleged benefits for health care consumers,” said acting FTC Chairman Maureen K. Ohlhausen.  “CON laws can restrict entry and expansion, limit consumer choice, and stifle innovation.  Additionally, the CON process can be exploited by incumbent firms to thwart or delay entry by new competitors, as well as potentially obstruct efforts to restore competition lost to an anti-competitive merger, harming free markets and consumers.”

The FTC worked with the Department of Justice’s Antitrust Division to issue the comment, after having been asked to by state Sen. David Wilson. Wilson, a Republican, is working on Alaska Senate Bill 62, a law that would repeal the CON laws in the state.

“Alaska lawmakers have the opportunity to bring lower costs and greater options to health care consumers,” said acting assistant attorney general Andrew C. Finch of the Antitrust Division. “CON laws can increase the costs of investing in new health care services and can shield incumbents from competition. Repeal of Alaska’s CON laws could invigorate competition in this critical sector, to the benefit of patients, employers, and other health care consumers.”

The FTC voted 2-0 to issue the comment. The staff contact for the case is Daniel J. Gilman of the Office of Policy Planning.

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