SC now allows hospitals to open without state approval. Will it lower health care costs?

In a shift that advocates say will improve access to and possibly lower costs for health care in South Carolina, more physician-owned hospitals will now be able to open without the state government’s approval.

On Tuesday, S.C. Gov. McMaster signed a bill into law — S. 164 — which eliminates the need for medical doctors to seek approval from the state before opening a health care facility in South Carolina, outside of nursing homes, or for purchasing medical equipment. This changes a requirement, called a certificate of need, that the Palmetto State has maintained since 1971.

The move, supporters say, is aimed at creating lower health care costs across the state, while improving the delivery of care to rural communities.

“This is a tremendous day for patients all across the state of South Carolina as a consequence of repealing certificate of need,” said the bill’s sponsor, state Sen. Wes Climer, R-York. “They will have more choices. They will have lower costs. And the people assembled here today work together to do that not by spending more money, not by creating new programs, but by getting government out of the way to unleash the private sector.”

In previous years, under the state’s certificate of need law, hospitals and other health care facilities were required to obtain approval from the South Carolina Department of Health and Environmental Control before opening or expanding new facilities, or purchasing new medical equipment. Such requests were subject to challenges by large competitors, such as Prisma Health, which, in effect, blocked smaller providers from extending care to rural and other high-demand communities.

“We want to have the best health care system in the world and it’s no reason at all why we can’t do it,” McMaster said. “We’re here today to see that the health care system (in South Carolina) and the health of our people is A plus.”