The impact of certificate of need laws on heart attack mortality: Evidence from county borders

Abstract

Certificate of need (CON) regulations requires that health care providers obtain state approval before offering a new service or expanding existing facilities. The purported goal of CON regulations is to reduce health care costs by generating regional economies of scale and reducing redundant investments resulting from excessive competition. Critics of CON regulations note that the regulatory environment increases the costs of expansion and may incentivize health care providers to forgo capital investment, which can have a negative effect on health outcomes. To estimate the net effect of CON regulations, I use a border discontinuity design to measure within-regional heart attack mortality spanning 1968 to 1982. I estimate that CON regulations led to an increase in heart attack deaths, by 6%-10%, three years after the policy was enacted.