The S.C. Supreme Court has sent Gov. Nikki Haley a needed reminder that she can't make changes to established state law with a simple swipe of her veto pen.
Last year, as part of her line-item vetoes in the state budget, the governor vetoed the $2 million the state Department of Health and Environmental Control used to fund its Certificate of Need Program.
Hospitals must obtain a certificate of need from DHEC before they can buy expensive new equipment or start offering new treatment programs. The theory behind the program is that it holds down health care costs. If a hospital buys an expensive scanner that is duplicated at another nearby hospital, or if one hospital starts an open-heart surgery center that is already available at another nearby hospital, that duplication will drive up costs as the hospitals seek to recover the costs of the equipment. The Certificate of Need Program gives the state the ability to regulate where equipment and treatment programs go to ensure efficiency.
The governor claims that this government management is less effective than letting free market forces dictate which services are offered at each hospital. As a lawmaker, she fought the Certificate of Need Program when it denied a Lexington County hospital, at which she was employed, a certificate to start a heart surgery center.
If Haley truly thinks the Certificate of Need Program should be abolished, then she needs to convince lawmakers to change the law. She didn't do that. She simply vetoed the funding for the program, convinced lawmakers to uphold that veto, and declared the program dead. Lawmakers who voted to uphold the veto have since declared that they didn't think they were killing the Certificate of Need Program.
The veto put hospitals in a terrible situation. State law still required them to get a certificate of need for new programs and expansions, but the funding for the program had been killed, and DHEC wasn't giving out certificates. Dozens of projects around the Palmetto State, representing about $100 million, were put on hold by this situation.
Several hospitals and a hospital association sued, and the Supreme Court sided with them last week, ruling that the veto killed the $2 million set aside for the program but did not end the Program, which is still required by state law. The justices ruled that DHEC must find another way to fund the program.
The ruling provided a necessary check on runaway power.