Certificate of Need (CON) for Cardiac Care: Controversy over the Contributions of CON

Abstract

To test whether state Certificate of Need (CON) regulations influence procedural mortality or the provision of coronary artery bypass graft surgery (CABG) and percutaneous coronary interventions (PCI). Medicare inpatient claims obtained for 1989-2002 for patients age 65+ who received CABG or PCI. We used differences-in-differences regression analysis to compare states that dropped CON during the sample period with states that kept the regulations. We examined procedural mortality, the number of hospitals in the state performing CABG or PCI, mean hospital volume, and statewide procedure volume for CABG and PCI. States that dropped CON experienced lower CABG mortality rates relative to states that kept CON, although the differential is not permanent. No such mortality difference is found for PCI. Dropping CON is associated with more providers statewide and lower mean hospital volume for both CABG and PCI. However, statewide procedure counts remain the same. We find no evidence that CON regulations are associated with higher quality CABG or PCI. Future research should examine whether the greater number of hospitals performing revascularization after CON removal raises expenditures due to the building of more facilities, or lowers expenditures due to enhanced price competition.