Top-Down Healthcare: The Dangers of CON and Centralized Planning

Top-Down Healthcare: The Dangers of CON and Centralized Planning

In 1968, Marina was a young gymnast in the Ukrainian republic of the former Soviet Union. As is common in that sport, she sustained an ankle injury. Anyone who has a twisted ankle knows that there’s a fifty-fifty chance it’s either sprained or broken, and the only way to know for sure is an X-ray. However, the clinic Marina’s family was allowed to use had no X-ray machines. Her friend, whose father was a party member, knew where Marina could get top-notch treatment.

Like many Soviets, Marina didn’t realize she was living in a two-tiered system—until she experienced it firsthand. Her injury should have been treated the same way regardless of her family’s status. But in a centrally planned system, access isn’t determined by need; it’s determined by who you know and how much power you have. This is the unavoidable outcome of top-down healthcare planning despite the promises of the Communist Party. Article 42 of the Soviet Constitution states that:

“Citizens of the USSR have the right to health protection. This right is ensured by free, qualified medical care provided by state health institutions; by extension of the network of therapeutic and health-building institutions; by the development and improvement of safety and hygiene in industry; by carrying out broad prophylactic measures; by measures to improve the environment; by special care for the health of the rising generation, including prohibition of child labour, excluding the work done by children as part of the school curriculum; and by developing research to prevent and reduce the incidence of disease and ensure citizens a long and active life (Soviet Constitution, 1936).”

Sadly, this system never worked as designed and couldn’t. In the USSR, healthcare, like all centralized policies, was intended to provide everyone with the same high-quality care. The USSR’s system aimed to be centrally controlled and “equitable” but instead led to severe disparities. Only elite officials, party members, and their families had access to high-quality care through a separate tier of facilities, which drew a disproportionate share of all health funding.

Meanwhile, “ordinary Soviets” endured long wait times, shortages, and subpar care. Marina’s parents, like many others, resorted to stealing from their workplaces and hoarding items that were bartered for medical services. The reality was they didn’t know what they lacked. Had Mariana’s friend never taken her to the other clinic, she might never have known about it. In the Soviet Union, people didn’t discuss the lack of healthcare access because they didn’t know what they were missing, and it did no good to complain to or about the party that acknowledged no mistakes.

In the Soviet system, rural care, as in West Virginia, was the last to receive resources. The late E.N. Chazov, former Soviet Minister of Health (1987-1990), complained about the lack of funding for this even more neglected healthcare segment. In rural areas, only 35% of hospitals had hot water, 27% had no sewage system, and 17% had no running water.

The Soviet Union’s collectivist system promised equality but delivered privileges for the elite and scraps for everyone else. West Virginia’s Certificate of Need (CON) laws, which empower government bureaucrats to decide where hospitals and medical equipment can be placed, have done the same.

Initially intended to prevent overbuilding and reduce healthcare costs, CON laws have been in place since 1977. Like the Soviet experiment in socialism, however, these regulations promise much as the Soviet Constitution regarding healthcare, but instead, they have created an untenable two-tiered system in West Virginia.

In this centrally controlled system, the government—not the market—determines which facilities and equipment are necessary, limiting expansion and access. CON laws create inefficiencies and restrict innovation. The result? Outcomes reminiscent of the Soviet model. Ordinary citizens face long wait times, limited services, and reduced access, especially in rural areas.

What happens when the government tries to centrally plan a complex system like healthcare? Economist F.A. Hayek’s classic warning in The Road to Serfdom comes to mind. Central planners cannot effectively gather or use dispersed knowledge, causing inefficiencies and resource misallocations. Unlike decentralized markets, where prices communicate information and competition corrects errors, centralized systems magnify mistakes with widespread consequences.

West Virginia’s CON laws are a case study in Hayek’s warning. They limit competition, artificially restrict supply, and force new providers to navigate a bureaucratic maze to offer their services. The result? Ordinary citizens, especially in rural areas, face long wait times, limited medical options, and worse health outcomes.

In the Soviet Union, political favoritism worsened inequalities. In West Virginia, the largest healthcare corporations often benefit from CON laws by avoiding competition. Restrictions on the number of doctors, facilities, and equipment harm overall health outcomes.

Restricting competition prevents new healthcare providers from entering the market, stifles innovation, and keeps costs high. Limited resources disproportionately affect rural and underserved communities. CON decisions often favor established providers, mirroring the nepotism seen in the Soviet system.

Who are the haves and have-nots in this collectivist game? States like Florida and Pennsylvania, which repealed CON laws, have experienced healthcare growth—more hospitals, better services, and increased access. West Virginia can do the same.

We must reject the failed model of top-down healthcare planning. Centralized control limits progress, reduces access, and entrenches inequality. If we want a healthcare system that serves everyone—not just the elites—we must embrace competition, innovation, and the free market.

Sources:

The Soviet Union: Healthcare 2016-03-29; Last updated: 2016-03-29

https://nintil.com/the-soviet-union-healthcare/.

Written by: Tiffany Hoben, Director of Education Partnerships & Strategy at the Cardinal Institute, and Ken Pope, Senior Fellow at the Victims of Communism Memorial Museum