By Dutch Rojas
The Empty Surgery Center That Perfectly Explains Why Your Insurance Is So Damn Expensive
Picture a brand-new, $3 million outpatient surgery center in Cedar Rapids, Iowa.
Stainless steel operating rooms. State-of-the-art lights. Sterile, silent, perfect.
It has been sitting empty for twenty years.
Dr. Lee Birchansky, an ophthalmologist, built it next to his clinic so he could perform cataract surgeries and other routine eye procedures more cheaply and quickly than at big hospitals.
He followed every rule.
Got his licenses.
Passed every inspection.
Then he asked the government for permission to turn on the lights.
Denied.
He asked again. Denied.
Again. Denied.
Four times. Two decades.
Why?
Because the two hospital systems that control 95% of surgery in the area told the state there was “no need” for his building.
They showed up at the hearings.
They hired lawyers. They called in favours.
They won.
So today, patients who need cataract surgery still drive to those same hospitals, pay double, wait longer, and get billed thousands more; money that flows straight into the pockets of the very institutions that blocked Dr. Birchansky from competing.
This isn’t a permitting glitch.
This is the system’s design.
It’s called a Certificate of Need (CON).
A Soviet-style law still on the books in 35 states that forces doctors and entrepreneurs to beg a government board, often stacked with their competitors, for the right to open a clinic, buy an MRI, or add hospital beds.
The board pretends it’s “preventing duplication” to keep costs down.
Reality: It lets giant hospital systems act as gatekeepers and protect their monopoly profits.
The Federal Trade Commission and Department of Justice have been screaming for twenty years that CON laws raise prices, limit access, and kill innovation.
Economists just ran the numbers on hundreds of studies: CON states have higher costs, fewer facilities, worse outcomes, and were 27% more likely to run out of ICU beds during COVID.
But the hospital lobby is powerful, the moats are deep, and the empty surgery centers keep piling up.
Dr. Birchansky finally sued in 2022. A federal judge just let the case move forward.
Good.
Because no American should have to sue his own government for the right to treat patients in a building he already paid for.
The Certificate of Need isn’t a dusty relic from the 1970s.
It’s the quiet little law that ate American healthcare, and it’s still eating your wallet right now.
