Taking the CON out of Pennsylvania: Did hip/knee replacement patients benefit? A retrospective analysis

Abstract

We analyze the effects of Certificate of Need (CON) laws on outcomes for hip and knee replacement procedures. Federal CON programs began in 1974 to stem rising health care costs by limiting hospital expansion and acquisition of equipment. The federal requirement for CON programs ended in 1987; however, 36 states and DC still maintain various forms of CON programs.In 1996, Pennsylvania (PA) let its CON law expire. We use data from the National Inpatient Survey from HCUP for the years 1993–1999 and examine four outcomes: hospital acquired infections, mortality, length of stay, and total charges. We use a difference-in-differences estimation method leveraging the expiration of PA's law to compare outcomes between patients in PA with patients in states that continued to have a CON law. We control for a number of covariates and pre-treatment trends in our analysis.We focus on hip and knee replacement surgeries — two procedures that have expanded greatly, have contributed increasingly to growing health care costs, and have not been well studied in the literature —for a population that includes Medicare beneficiaries and patients with other payment methods.Our results provide new evidence of the effects of CON (de)regulation. We find that the expiration of CON laws in PA increased length of stay within the patient population and reduced the probability of dying. The CON laws did not have statistically significant effects on hospital acquired infections or total charges.