Alaska’s Department of Health has, once again, denied an application by Alaska Regional Hospital to expand its emergency room department capacity in Anchorage.

Employing Alaska’s controversial Certificate of Need law, Health Commissioner Heidi Hedberg blocked the hospital’s plan to construct a free-standing emergency department, in South Anchorage.

The new construction, estimated to cost about $17.4 million, would have consisted of 10,860 square feet, including five emergency department beds, one CT scanner, one x-ray machine, one ultrasound machine, defibrillators, patient monitors and an infant warmer.

Those plans were denied in a decision issued on Feb. 27.

This is not the first time Alaska Regional has attempted to expand its emergency services in South Anchorage.

Similar attempts were made in 2015 and 2023. In both instances, the state determined that Anchorage did not need a standalone ER.

“Certificate of need laws turned out to be an abject policy failure. To its credit, Congress quickly admitted its failure, noting that certificate of need laws ‘failed to control healthcare costs…”

According to Alaska Regional’s website, the project would have been built at 11841 Old Seward Highway with the intention of bringing services to a part of Anchorage that currently lacks easy access to emergency care from board-certified ER physicians. The facility would have been a 24-hour operation, capable of addressing medical needs such as heart attacks, strokes, intensive trauma, bone fractures and more.

“Emergency room demand in Anchorage is rising, but capacity has not kept pace,” the hospital website states. “Alaska Regional Hospital’s ER volume has increased 14% since last year, and ambulance arrivals are up 23%. Opening a new ER in South Anchorage will relieve the growing pressure on other emergency rooms in the area and ensure a higher level of care from physician to patient.”

Hospitals in Alaska, however, are heavily regulated by state law when it comes to expansion efforts. The state imposes restrictions on general medical-surgical beds, pediatric beds (including NICU bassinets), intensive care beds, acute rehab beds, and obstetric beds (which include birthing and recovery rooms in general). This means that Alaska hospitals must obtain permission from the state – with input from other competing hospitals – before being allowed to expand.

According to the Alaska Policy Forum, these government-imposed restrictions drive up the cost of health care, while empowering existing hospitals to help derail their competition.

One such competitor, Providence Alaska Medical Center, has been publicly opposed to Alaska Regional’s project. Providence’s website includes a host of objections against the free-standing facility, despite the fact that Providence runs similar operations across the Lower-48.

Alaska Policy Forum makes the case that Certificate of Need laws bypass normal licensing procedures, as “approval is based not on the qualifications of the facility or its workers, but on the judgment of the government that the new or expanded facility is needed in the proposed area.”

“Unsurprisingly, many health care facilities, such as hospitals, in Alaska are shuttered before they can even begin caring for patients,” Alaska Policy Forum’s website notes. “Just as Alaskans’ might doubt the prospects for a new Carl’s Jr. if the company required the approval of a nearby Burger King, new health care facilities struggle to convince existing facilities that they are needed.”

Certificate of Need laws first came about in the 1960s due to concern about the rise in healthcare spending. At that time, a number of states began limiting the supply of hospitals in an attempt to reduce costs and make hospitals more accessible.

The Institute for Justice website, observes that Congress passed the National Health Planning and Resources Development Act in 1974, which threatened states’ federal funding reimbursements if they didn’t adopt certificate of need laws.

“At the time, every state except Louisiana enacted certificate of need laws,” Institute for Justice website states. “But certificate of need laws turned out to be an abject policy failure. To its credit, Congress quickly admitted its failure, noting that certificate of need laws ‘failed to control healthcare costs and were insensitive to community needs.’”

In 1986, Congress repealed the NHPRDA, and a dozen states dropped their certificate of need laws.

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