2018] IOWA’S CERTIFICATE OF NEED LAW 387
only ambulance capable of transporting the baby was not available because it
was out responding to another call.7 The doctor had to tell the mother, who
was fighting for her life, that an ambulance that could potentially save her
baby was not coming.8 Ultimately the mother survived, but the baby tragically
Unfortunately, the baby’s fate was foreseeable. In July of 2010 LewisGale
applied to the Virginia Department of Health seeking permiss ion to build a
neonatal specialty care unit.10 The Department denied the application.11 As a
part of the denial, the Department concluded that a neonatal specialty care
unit at LewisGale “would foster institutional competition.” 12 It was
competition—or at a minimum, the notion of avoiding competition—that
contributed to a baby’s death. Virginia is not the only state that requires
certain health care providers to obtain government permission before
opening a medical facility.13
Dr. Lee Birchansky is an ophthalmologist in Cedar Rapids, Iowa, offering
patients cataract and other outpatient surgeries.14 Dr. Birchansky operates his
medical practice, Fox Eye Laser & Cosmetic Surgery Institute, and offers
outpatient cataract surgeries in a surgery center he constructed a nd equipped
next to his medical office. 15 Before offe ring new services, Iowa law requires
health providers to obtain a Certificate of Need (“CON”).16 Essentially, a CON
is a permission slip from the government signifying that, after its determination,
a need exists in the market for the services that the health provider intends to
offer. In addition to requiring the government’s permission, the process also
requires the government to inform the applicant’s potential competitors, who
then have the opportunity to offer opposing testimony for the project at a
public hearing.17 A simple e xample illustrates the difficult barriers to entry
inherent in the CON process.
Imagine you would like to own a fast-food restaurant. You have decided
to open a restaurant in the same area as a potential competitor. If CON
applied to the fast-food industry,18 you would have t o approach the state
government and plead your case that a need exists for your restaurant. Then,
12. Id. (emph asis added).
13. See infra notes 91–93 and accompanying text.
14. Birchansky, su pra note 1.
15. Id.; see also Cindy Hadish, Cedar Rapids Doctor, State Clash Over Cataract Surgeries, GAZETTE
(Mar. 6, 2012), http://www.thegazette.com/2012/03/06/cedar-rapi ds-doctor-state-clash-over -
16. IOWA CODE § 135.63(1) (2017).
17. See infra Section II .C.2.
18. Luckily, in Iowa, CON is only ap plicable in the health care industry.