I've never heard this reasoning before, are you saying the reason competitive healthcare services/pricing doesn't exist is because competing healthcare providers within a region are disallowed?
Yup. We basically built a worst-of-all-options* system in the US. It's not free market. And it's not fully socialized.
* From the perspective of an average consumer. It's a brilliant system if you're in a position to profit off it. And it has resulted in the best health care in the world (for those who can afford it).
I've heard of that requirement before (of course the artifical limiting of the numbers of doctors able to start practicing every year is somewhat a similar type of practice,) but I'd be curious to see what the original rationale for the Certificate of Need program was.
Is '[too much] competition' not supposedly the bedrock of our Wonderful System of Market Capitalism?
It has been law in many states starting in the 1960's. The original intention was to prevent too much competition which could skew incentives.