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Medical Professionals File Lawsuit Against Virginia

June 12, 2012

A coalition of medical professionals and the Institute for Justice filed a federal lawsuit demanding that Virginia stop shutting out new medical services for no reason beyond protecting the profit margins of existing businesses.

The lawsuit challenges Virginia’s certificate of need (or CON) program, which actually makes it illegal to offer new medical services or purchase certain types of medical equipment without first obtaining permission slip from the government. Under the program, licensed medical professionals who want to offer new services must first persuade government officials that their new service will be “needed”—and they must do so in a process that verges on full-blown litigation in which existing businesses are allowed to participate and oppose new competition. This process can take several years and cost hundreds of thousands of dollars. Frequently, the process results in new services’ being forbidden from operating at all.

“Virginia’s CON program is nothing more than the government’s permission slip to compete, amounting to a certificate of monopoly for favored established businesses,” said Institute of Justice attorney Robert McNamara. “Patients and doctors—not the government—are in the best position to decide what medical services and equipment are needed in Virginia.”

Mark Baumel, a physician entrepreneur who is trying to bring an innovative colon-cancer screening and treatment service to Virginia. Every year, 50,000 Americans—and about 1,300 Virginians—die from colon cancer. While approximately 90 percent of colorectal-cancer deaths are preventable if caught early, only 50 percent of the at-risk population gets screened, in part because the process can be unsettling and invasive.

Dr. Baumel hopes to fix this problem with a system, Integrated Virtual Colonoscopy, which makes colon-cancer screening and treatment far easier. Integrated Virtual Colonoscopy uses modern imaging technology (called a CT scanner) to take a noninvasive picture of the patient’s lower abdomen, while a team of radiologists and gastroenterologists work together to provide same-day diagnosis and treatment. By reducing the discomfort, risk and inconvenience of colon-cancer screening, the new method has real promise to save lives.

Dr. Baumel has had success offering IVC at his flagship office in Delaware and has agreements to expand into New Jersey. But he cannot operate in Virginia because the state’s CON program will not allow him and his partners to open a new colon health center that would offer IVC or even permit them to buy the CT scanners necessary to do virtual colonoscopies.

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