Abstract
BackgroundCertificate of Need (CON) laws, currently in place in 35 US states, require certain health care providers to obtain a certification of their economic necessity from a state board before opening or undertaking a major expansion. We conduct the first systematic review and cost-effectiveness analysis of these laws.MethodsWe review 90 articles to summarize the evidence on how certificate of need laws affect regulatory costs, health expenditures, health outcomes, and access to care. We use the findings from the systematic review to conduct a cost-effectiveness analysis of CON.ResultsThe literature provides mixed results, on average finding that CON increases health expenditures and overall elderly mortality while reducing heart surgery mortality. Our cost-effectiveness analysis estimates that the costs of CON laws somewhat exceed their benefits, although our estimates are quite uncertain.ConclusionsThe literature has not yet reached a definitive conclusion on how CON laws affect health expenditures, outcomes, or access to care. While more and higher quality research is needed to reach confident conclusions, our cost-effectiveness analysis based on the existing literature shows that the expected costs of CON exceed its benefits.
Highlights
Certificate of Need (CON) laws, currently in place in 35 US states, require certain health care providers to obtain a certification of their economic necessity from a state board before opening or undertaking a major expansion
New contribution Research has examined the impact of various dimensions of CON programs, but we are unaware of any published systematic review of this literature or any net assessment of the benefits and costs of these statutes
What is the amount of government regulatory costs related to the CON regulation? This includes state costs to monitor and enforce rules related to certificate of need for hospitals, nursing homes or other facilities to which CON is applicable
Summary
We investigated two broad research areas related to the impact of CON regulation in the U.S The questions are listed below, along with a brief description of our analytical approach. To the extent that CON efforts to prevent “cream-skimming” were successful, this might allow the survival of certain facilities such as large urban public hospitals that might otherwise be forced to shut down for lack of sufficient paying patients In theory, this too could result in health benefits and/or reductions in avoidable hospitalizations if indigent patients were able to receive essential care on a timely basis. Whether informally or formally through explicit commitments required for approval, CON regulators have the power to restrict approval to facilities willing to supply services perceived to be in the public interest, such as charity care or care in medically underserved areas [8] Even if they had no measurable impact on health outcomes, such improvements in access to care would be of value, so we sought to ensure to include literature focused on this dimension of CON performance.
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