August 29, 2017

Certificate-Of-Need Laws: How CON Laws Affect Spending, Access, and Quality across the States

Thirty-five states and the District of Columbia currently impose certificate-of-need (CON) restrictions on the provision of healthcare. These rules require providers to first seek permission before they may open or expand their practices or purchase certain devices or new technologies. The applicant must prove that the community “needs” the new or expanded service, and existing providers are invited to challenge a would-be competitor’s application.

Decades of research by health economists, regulatory economists, and antitrust lawyers shows CON laws fail to achieve their expressed goals, limit supply, and undermine competition.

Until now, there has been no systematic way to demonstrate how CON laws correlate with characteristics of local healthcare markets. We offer an easy-to-navigate, comprehensive resource that shows how CON laws correlate with healthcare market factors on a state-by-state basis. We also provide more context for how these laws affect providers and patients in particular states. States on the map colored in blue have CON laws while states in grey do not. Click on the map above to access more in-depth information on each state with CON laws in a downloadable PDF.

Each state profile includes the following:

  1. The most up-to-date account of the healthcare services regulated through CON by each state
  2. How CON laws affect hospital quality based on numerous indicators such as mortality and readmission rates 
  3. How CON laws affect total healthcare and physician spending
  4. How CON laws affect the availability of medical imaging services 
  5. How CON laws affect access to healthcare facilities

Finally, a Frequently Asked Questions document to serve as a resource for readers, showing how we derived our state-specific estimates, a brief survey of our research and that of others, and an explanation for how we formulated our research questions.

For more information on certificate-of-need laws, see our research, testimonies, videos, and charts at mercatus.org/tags/healthcare-favoritism.