"Currently, 36 states and the District of Columbia prohibit entry or expansion of healthcare facilities through “certificate-of-need” (CON) programs. These laws, which require government permission before a facility can expand, offer a new service, or purchase certain pieces of equipment, were enacted in the belief that restricting entry would lower health care costs and increase availability of these services to the poor.
These regulations were initially enacted under the theory that unregulated market competition would drive medical providers to overinvest in facilities and equipment, raising the cost of medical care.
A recent study by Thomas Stratmann and Jacob Russ, however, finds that these regulations do little to increase access to health care for the poor, but they instead limit the supply of such services. For example, States with Certificate of Need programs are associated with:
131 fewer beds per 100,000 persons.
A reduction by between 1 and 2 hospitals providing MRI services per 500,000 persons.
A reduction of 37 percent in the number of hospitals offering CT scans."
Saturday, July 4, 2015
How State Certificate-of-Need (CON) Laws Affect Access to Health Care
From the Mercatus Center. Excerpt: