Lemonade Stands & CON Law

Did you start a lemonade stand as a child? I certainly did. My mom had a fantastic lemonade recipe – perfectly tart and sweet. We would make it in the kitchen during the summers. My little brother and I would set up a stand at the end of our driveway. We would sell lemonade and sometimes other snacks to our neighbors. It was never big business, but it was a fantastic opportunity to practice our sales skills, earn a little extra spending money, and grow our entrepreneurial spirit. I can only imagine how my childhood would’ve been different if there was a neighborhood CON law that affected lemonade stands.

My brother and I would’ve had to go before a board of other kids and their parents in the neighborhood who have lemonade stands to ask permission to start our own. Do you think they’d let us? Of course not! They don’t want competition when our neighbors (customers) could be going a couple blocks over to their lemonade stands instead.

Now, I know it sounds a bit ridiculous but this is what a CON law, certificate of need law, does. It empowers competitors to veto a new business that wants to serve a particular area. It’s the very epitome of a good ol’ boys club where those who are already “in” keep everyone else out.

Example of an old CON Law in West Virginia

CON laws occur in a variety of industries. A notable example that I recently came across was Arty Vogt’s story from the Pacific Legal Foundation. Thankfully, his story had a happy ending due to PLF’s work on his behalf. However, that’s not the case for everyone or every industry. You can listen to his story by watching the short video below.

CON Laws & Health Care

The most onerous and dangerous CON laws exist in the health care industry. Certificate of need laws require health care providers to first get a “certificate of need” proving “need” before opening up a new health care facility, expanding services, or buying new medical equipment. During this process, competitors can veto the new entrant. They’ll say that a “need” isn’t there because they can fulfill any needs in that region.

This corrupt system has been shown to limit access to high quality, affordable health care. It’s particularly harmful in rural communities that already have limited access to health care, especially specialized services.

Time to Make A Change

This is why our executive director, Garrett Ballengee, discussed the importance of eliminating West Virginia’s healthcare CON law system when discussing what public policy reforms we’ll be pursuing in the near future. Building the West Virginia Miracle requires us to expand freedom and opportunity in all areas of life. Healthcare included.

 

Learn More about Certificate of Need Laws

You can read more about certificate of need laws on our blog.

You can also read in-depth research about West Virginia’s CON laws and how they affect residents from the Institute for Justice.

 

Amanda Kieffer is the Communications Director for the Cardinal Institute for West Virginia Policy.