A state capitol hearing room, sometime this spring.
Tennessee lawmakers vote, in a bipartisan majority, to unravel most of their certificate of need rules. They had a funding incentive to do it. They did it anyway.
That is the story most people are missing right now. 🏥
According to KFF Health News, the Trump administration has tied part of the $50 billion five-year Rural Health Transformation Program to whether states end or loosen their certificate of need, or CON, laws. CMS called these laws, verbatim, “an additional expense and burden on rural facilities.” Six states have already said in their applications that they would revisit their laws.
And the reaction from healthcare advocates has been almost entirely negative.
I think that reaction is wrong. Not politically wrong. Factually wrong.
CON laws were designed to prevent monopolies and control costs. That was the theory. The reality, according to KFF Health News, is that critics say the laws have raised healthcare prices, stalled needed facilities, and barred rural patients from new technology.
🔹 More than 30 states, plus Washington, D.C., still enforce some form of CON law.
🔹 Six states signaled they would revisit their laws just to compete for this funding.
🔹 Tennessee did not just signal. They passed a bill, bipartisanly, that unravels most remaining CON rules over the next four years.
This is not a Trump-only play. South Carolina already stopped requiring CON applications for new hospital construction or expansion, leaving them only for nursing homes. A Republican state senator there quoted in the article made a pointed observation: if President Obama and President Trump can agree that something has merit, it probably does.
Now, here is the honest counterpoint.
Maureen Hensley-Quinn, a researcher at the National Academy for State Health Policy, put it plainly. “States need to carefully weigh the trade-offs of supporting a ‘voluntary’ federal policy no matter what,” she said. The money can tip the scale in ways that may not reflect a state’s actual healthcare landscape. Repealing a CON law does not automatically conjure a rural hospital. It removes a barrier. Whether capital and providers follow is a separate question entirely.
That is a real concern. Regulatory reform without investment is just deregulation.
But the default position of protecting CON laws because they theoretically prevent monopolies needs to face the evidence. In practice, those same laws have been used by incumbent hospital systems to block competitors from entering rural markets. The patients those laws were supposed to protect have often been the ones denied access to new technology and new facilities.
$50 billion is an enormous lever. Using it to push states toward a decades-old reform that has bipartisan credibility is not reckless. It is arguably the only moment large enough to actually dislodge rules that have calcified over 50 years.
The real risk is not that states repeal CON laws. The real risk is that states repeal them, pocket the funding, and do nothing to attract providers into underserved communities afterward. That gap, between deregulation and actual care delivery, is where rural patients get left behind.
That is where the oversight needs to be focused. Not on stopping the reform. On holding states accountable for what comes next.
👉 Follow Jonathan Govette, CEO of Oatmeal Health, for daily healthcare insights on LinkedIn. Deeper dives in The Oatmeal Bite on LinkedIn: https://www.linkedin.com/newsletters/the-oatmeal-bite-7368331304385314817/
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CEO/Co-Founder @ Oatmeal Health | AI Lung Cancer Screening | Almost Became a Doctor | Engineer | Follow to Share What I’ve Learned Along the Way
