A map of states and how much they regulate healthcare through a certificate- of-need system. Institute for Justice report

Connecticut has rising health care costs, and Gov. Ned Lamont wants to help. But before pushing his proposed legislation, which he submitted to the General Assembly in February, he should spend one night at the Copper Beech Inn in Essex.

The property, built in 1899, offers luxury accommodations and fine dining on a 53-acre estate. Guests have enjoyed the inn for decades, but it was not the first to arrive in the Connecticut River Valley. Less than three miles away is the Griswold Inn, which opened in 1776.

The extra history gives the Griswold bragging rights, but not authority to ban other hotels. State laws do not force newcomers to get approval from established innkeepers before opening on their turf. The Griswold has no veto power to stop growth, which allows the hospitality market to flourish and evolve.

Health care is different. Incumbency comes with privileges.

Protectionist laws, already on the books, require something called a certificate of need or “CON” before anyone can build facilities, add beds or purchase major medical equipment. CON applicants not only must prove to the state’s satisfaction that their services are needed, but they must survive challenges from would-be rivals—who can participate in the process and argue for denial.

Put simply, a CON is a government permission slip that shields industry insiders from competition.

Rather than dismantle the rigged system, Lamont wants to expand it by adding tougher penalties for CON violations and higher fees for CON applications. Part of House Bill 6669, one of two proposed measures from the governor, would force CON applicants to reimburse the state for consulting fees if the government hires outside experts to review applications.

Lamont defends his plan using upside down logic. He suggests more red tape, higher startup costs and less consumer choice somehow would help Connecticut families. “This will curb health care costs by preventing duplicative services in specific areas,” a news release from his office claims.

Decades of research and real-world experience show otherwise. The Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission sounded the alarm as far back as 2008: “By their very nature, CON laws create barriers to entry and expansion to the detriment of health care competition and consumers.”

If CON rules applied in other industries, the Griswold could have blocked Copper Beech and other nearby inns. The Hartford Courant, which published its first edition in 1764, could have blocked other newspapers. Hartford Bank, which opened in 1792 and now operates as Shawmut National, could have blocked other financial institutions. And Louis’ Lunch, family run since 1895 in New Haven, could have blocked other restaurants.

These scenarios seem absurd, but the sabotage actually occurs in health care. Connecticut granted a CON to Hartford HealthCare and Yale New Haven Health in 2022, allowing the joint venture partners to move forward with plans to open the state’s first proton therapy center in Wallingford. But the state denied a CON application from Danbury Proton to open a similar facility 45 miles away.

Hartford HealthCare and Yale New Haven, two of the oldest and largest providers in the state, were not neutral observers in the process. They sent an agent to argue against Danbury Proton, which has spent three years battling for a CON.

Lamont revealed the truth about CON laws during the early weeks of the COVID-19 pandemic. “Conning the Competition,” a nationwide review of CON laws from our public interest law firm, the Institute for Justice, finds that Connecticut and 23 other states issued executive orders suspending CON enforcement in 2020 so health care providers could respond more nimbly to the crisis.

If Connecticut wants to lower health care costs, it should take Lamont’s temporary order and make it permanent. Senate Bill 170, sponsored by Sen. Ryan Fazio, R- Greenwich, would do just that. If the measure passes, Connecticut would join New Hampshire, California, Texas and nine other states that fully repealed their CON laws years ago.

A quick vacation in the Connecticut River Valley would show why more choice is better, not worse.

Jaimie Cavanaugh is an attorney and Daryl James is a writer at the Institute for Justice in Arlington, Va.