Certificate Of Need Laws Research Articles

Barriers to Entry in the Healthcare Markets: Winners and Losers from Certificate-of-Need Laws

Certificate-of-need (CON) laws in 21 states restrict medical providers from acquiring imaging equipment, including magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scanners. Using difference-in-difference methods to control for state invariant characteristics, we test the effect of those restrictions on incumbent hospitals and entry into the imaging market. We find that states with CON laws demonstrate less market entry and lower market penetration of nonhospital and new hospital providers than do states that do not have those laws. Further, hospitals that opened before the implementation of a CON law face less competition in CON states than in non-CON states. We also study the effect of CON laws on consumers, which we measure as patient access to imaging services. We find that residents in CON states are more likely to travel outside their home county to obtain imaging services than are their counterparts in non-CON states.

Does certificate of need law enhance competition in inpatient care market? An empirical analysis.

This article investigates the impact of Certificate of Need (CON) laws on competition in the inpatient care market. One of the major criticisms of these laws is that it may hinder competition in the health care market, which can lead to higher prices. However, from a theoretical standpoint, CON laws could also promote competition by limiting excessive expansion from incumbents. Our main conclusion is that CON laws by and large enhanced competition in the inpatient market during the period of our study. This indicates that the effects of CON laws to hinder predatory behavior could dominate its effects of preventing new entrants into the inpatient care market. We do not find statistically significant evidence to reject the exogeneity assumption of either CON laws or their stringency in our study. We also find factors such as proportion of population aged 18-44, proportion of Asian American population, obesity rate, political environment, etc., in a state significantly impact competition. Our findings could shed some light to public policy makers when deciding the appropriate health programs or legislative framework to promote health care market competition and thereby facilitate quality health care.

Effect of Certificate of Need Law on the intensity of competition: The market for emergency care

PurposeThis article aims to contribute to the academic literature in better understanding the impact of Certificate of Need (CON) Law on Emergency Department (ED) care. Impact of CON Law on ED competition remains an unanswered empirical question. MethodsWe examine the impact of CON Law and its stringency on the intensity of competition (rivalry among competitors) between EDs measured by the Herfindahl-Hirschman Index (HHI). We then estimate the effects of CON Law on HHI by treating CON as an exogenous (endogenous) variable. FindingsOn average the CON legislation enhances ED competition. A possible reason is that the law hinders predatory behavior, and therefore acts as an effective anti-trust tool. Other findings indicate that competition is found to be positively related to a state's population size and median income and negatively related with the prevalence of employer provided insurance and magnitude of illegal immigration in a state. Practical implicationsThis article sheds some light on how political regulations could affect healthcare market and hence may provide public policy makers some insights on reducing healthcare cost. OriginalityOur analysis of the impact of CON regulation on ED competition significantly contributes to the healthcare and strategy literature. The law potentially serves as an anti-trust tool in the hands of the government. We extend the empirical literature by treating CON Law and its stringency as exogenous (endogenous). Our comprehensive analysis considers a host of control variables such as population demographics, their health status and access to health care, healthcare facilities, political environment, in addition to the CON features.

Taking the Con Out of Pennsylvania: Did Hip and Knee Replacement Patients Benefit?

Policymakers and the general public have expressed increasing concern over rising health care costs. The Certificate-of-Need (CON) programs began at the federal level in 1974 to stem the increase in costs by limiting hospital expansion and acquisition of equipment. The federal requirement for CON programs ended in 1987; however, 37 states and DC still maintain various forms of CON programs. We examine the effect of the expiration of Pennsylvania's CON law on indicators of quality and cost of health care for patients undergoing hip and knee replacement surgery. We use the standard difference-in-differences method and the Synthetic Control method. Our preferred method indicates that the expiration had no statistically significant effect on our various measures of quality and cost.

The Effect of Certificate of Need Laws on All-Cause Mortality.

To test how Certificate of Need laws affect all-cause mortality in the United States. The data of 1992-2011 all-cause mortality are from the Center for Disease Control's Compressed Mortality File; control variables are from the Current Population Survey, Behavioral Risk Factor Surveillance System, and Area Health Resources File; and data on Certificate of Need laws are from Stratmann and Russ (). Using fixed- and random-effects regressions, I test how the scope of state Certificate of Need laws affects all-cause mortality within US counties. Certificate of Need laws have no statistically significant effect on all-cause mortality. Point estimates indicate that if they have any effect, they are more likely to increase mortality than decrease it. Proponents of Certificate of Need laws have claimed that they reduce mortality by concentrating more care into fewer, larger facilities that engage in learning-by-doing. However, I find no evidence that these laws reduce all-cause mortality.

Do Certificate-of-Need Laws Limit Spending?

In 35 states, certificate-of-need (CON) laws in health care restrict the supply of medical services. These regulations require providers hoping to open a new healthcare facility, expand an existing facility, or purchase certain medical equipment such as an MRI machine or a hospital bed to first prove to a regulatory body that their community needs the service in question. The approval process can be time consuming and expensive, and it offers incumbent providers an opportunity to oppose the entrance of new competitors. However, it was originally hoped that these laws would, among other things, reduce healthcare price inflation. In this brief, I review the basic economic theory of a supply restriction like CON, then summarize four decades of empirical research on the effect of CON on healthcare spending. There is no evidence that CON regulations limit healthcare price inflation and little evidence that they reduce healthcare spending. In fact, the balance of evidence suggests that CON laws are associated with higher per-unit costs and higher total healthcare spending.

Certificate of Need in the Post-Affordable Care Act Era

Certificate of need (CON) programs were conceived approximately fifty years ago as supply constraint mechanisms for health care services, in an environment that is essentially unrecognizable today. Every aspect of the health care landscape has changed dramatically, particularly in the years since the enactment of the Affordable Care Act. The historical rationales in support of CON programs have been vigorously questioned by scholars across disciplines, roundly criticized by the federal government, and largely disproven by research. Yet the status quo persists, with 36 states retaining CON laws, due in large part to a combination of entrenched interests and political inertia that prevents either repeal or significant modification. Still, proponents of a more efficient health care model need not lose hope. Kentucky was widely recognized as among the most successful states in its implementation of the Affordable Care Act. As part of its implementation efforts, the Commonwealth reformed its CON program to reward health care providers who embrace rather than resist the changes occasioned by health care reform. While the eventual impact of Kentucky’s CON modernization cannot yet be known, these reforms may offer insights for additional states as they consider whether and how to reform their own CON programs. Indeed, rather than being an historic relic that must be tolerated in the absence of political will for change, it may be possible for a modernized CON program to serve as an additional regulatory tool for states seeking to nudge their health care providers into fuller engagement in the post-Affordable Care Act health care landscape.

Does Certificate of Need Minimize Intensity Modulated Radiation Therapy Use in Patients with Low Risk Prostate Cancer?

IntroductionCertificate of need laws are optional from state to state, and are meant to limit the proliferation of certain unnecessary medical facilities. Theoretically, certificate of need laws should limit the use of intensity modulated radiation therapy in the population who likely would benefit from it the least, that is older or frail men with low risk prostate cancer. We evaluated the effect of certificate of need laws on the use of intensity modulated radiation therapy in these patients in a population based cohort. MethodsUsing the SEER (Surveillance, Epidemiology, and End Results) database linked with Medicare files we identified male residents of SEER regions who were diagnosed in 2004 to 2009 with low risk prostate cancer (T1, Gleason 6 or less, prostate specific antigen less than 10 ng/ml), who were 70 years old or older, or 65 years old or older, with a Charlson comorbidity score of 2 or greater. The end point was percentage of newly diagnosed patients who were treated with intensity modulated radiation therapy within 12 months of cancer diagnosis. Logistic regression was used to assess the impact of certificate of need laws on the use of intensity modulated radiation therapy. ResultsMore than 37% (4,491) of the patients came from states with radiation oncology certificate of need laws whereas 63% (7,572) came from states without certificate of need laws. Intensity modulated radiation therapy was performed in 30% of certificate of need cases vs 28% of noncertificate of need cases. Logistic regression analysis revealed that intensity modulated radiation therapy was used more often in states with certificate of need laws than in states without certificate of need laws (OR 1.13, 95% CI 1.04–1.23, p=0.006). ConclusionsCertificate of need laws do not effectively limit the use of intensity modulated radiation therapy in older or frail patients with low risk prostate cancer.

Can Health Spending Be Reined in Through Supply Constraints? An Evaluation of Certificate-of-Need Laws

For 50 years, US policymakers and economists have searched for ways to slow the growth of spending on health care. One approach currently taken by 35 states is to restrict the supply of health care by requiringnew and growing providers to show that they serve an “economic need.” Hospitals and certain other health providers must obtain a certificate of need (CON) from a state board before opening or expanding. I show that in a simple model where CON restricts supply, the effect of CON on spending depends on the price elasticity of market demand for health care. CON will work to restrain spending when demand is elastic; however, most estimates show the demand for health care to be quite inelastic. I therefore predict that CON willincrease prices for health care without much reducing its use, leading to an increase in spending. Using data from the National Health Expenditure Accounts, I estimate that CON laws do not reduce spending by any major payer or for any major type of provider and that they increase spending on some types of health care.

Higher Medicare SNF care utilization by dual-eligible beneficiaries: can Medicaid long-term care policies be the answer?

To examine outcomes associated with dual eligibility (Medicare and Medicaid) of patients who are admitted to skilled nursing facility (SNF) care and whether differences in outcomes are related to states' Medicaid long-term care policies. We used national Medicare enrollment data and claims, and the Minimum Data Set for 890,922 community-residing Medicare fee-for-service beneficiaries who were discharged to an SNF from a general hospital between July 2008 and June 2009. We estimated the effect of dual eligibility on the likelihood of 30-day rehospitalization, becoming a long-stay nursing home resident, and 180-day survival while controlling for clinical, demographic, socio-economic, residential neighborhood characteristics, and SNF-fixed effects. We estimated the differences in outcomes by dual eligibility status separately for each state and showed their relationship with state policies: the average Medicaid payment rate; presence of nursing home certificate-of-need (CON) laws; and Medicaid home and community-based services (HCBS) spending. Dual-eligible patients are equally likely to experience 30-day rehospitalization, 12 percentage points more likely to become long-stay residents, and 2 percentage points more likely to survive 180days compared to Medicare-only patients. This longer survival can be attributed to longer nursing home length of stay. While higher HCBS spending reduces the length-of-stay gap without affecting the survival gap, presence of CON laws reduces both the length-of-stay and survival gaps. Dual eligibles utilize more SNF care and experience higher survival rates than comparable Medicare-only patients. Higher HCBS spending may reduce the longer SNF length of stay of dual eligibles without increasing mortality and may save money for both Medicare and Medicaid.

Effect of Certificate of Need Law on Emergency Department Length of Stay

BackgroundThe impact of the Certificate of Need (CON) law on Emergency Department (ED) care remains elusive in the academic literature. ObjectivesWe study the impact of CON law on ED Length of Stay (LOS). MethodsWe examine ED LOS to detect any statistically significant difference between CON and non-CON states. We then estimate the effects of CON law on ED LOS by treating CON as an exogenous (endogenous) variable. ResultsWe find that the CON legislation positively impacts ED care by reducing ED LOS (95% confidence interval [CI] −61.3 to −10.3), and we can't reject the hypothesis that the CON legislation can be treated as an exogenous variable in our model. An increase in the stringency of the CON law (measured by the threshold on equipment expenditure that is subject to a CON review) tends to diminish this positive impact on ED LOS (95% CI 9.9–68.0). The party affiliation of the Governor (95% CI 10.3–37.5), the political environment as a function of the agreement on voting between state senators (95% CI−64.8 to −12.9), proportion of young population (0–17 years) when compared with the elderly (>65 years) (95% CI−2299.7 to −184.1), proportion of population covered by privately purchased insurance (95% CI−819.3 to −59.9), etc., are found to significantly impact ED LOS in a state. ConclusionThis study provides a better understanding of the impact of CON law on ED care, which extends the previous literature that has mainly focused on CON effects on inpatient care.

Heart Rythm Society expert consensus statement on electrophysiology laboratory standards: process, protocols, equipment, personnel, and safety.

ABBREVIATIONS CIED = cardiovascular implantable electronic device; CT=computed tomography; EP=electrophysiology; FDA= U.S. Food and Drug Administration; ICD=implantable cardioverterdefibrillator; MRI = magnetic resonance imaging; QA = quality assurance; QI = quality improvement; RF = radiofrequency; VT = ventricular tachycardia (Heart Rhythm 2014;11:e9–e51)

The effect of entry regulation in the health care sector: The case of home health

The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined health care markets and frequently cross state boundaries. We find that CON states use home health less frequently, but system-wide rehospitalization rates, overall Medicare expenditures, and home health practice patterns are similar. Removing CON for home health would have negligible system-wide effects on health care costs and quality.

Certificate of need and use of IMRT in elderly patients with low-risk prostate cancer.

204 Background: Certificate of Need (CON) laws are optional from state to state, and are meant to limit proliferation of certain unnecessary medical facilities. Theoretically, CON should limit the use of IMRT (intensity modulated radiation therapy) in the population who likely would benefit from it the least: older or debilitated men with low risk prostate cancer. We evaluated the effect of CON on IMRT use in these patients in a population-based cohort. Methods: Using the Surveillance, Epidemiology and End Results (SEER) database linked with Medicare files, we identified male residents of SEER regions who were diagnosed between 2004-07 with low- risk prostate cancer (T1, Gleason≤6, PSA<10) and were either ≥70 years old or ≥65 years old with Charlson comorbidity score ≥ 2. The endpoint was percentage of newly diagnosed patients who were treated with IMRT within 12 month of cancer diagnosis. Logistic regression was used to assess the impact of CON laws on IMRT use. Results: 2,263 (33%) of the patients came from states with radiation oncology CON laws, whereas 4,622 (67%) came from non-CON states. IMRT was performed on 28% of CON patients versus 24% of non-CON patients. Logistic regression analysis using two sided p-values revealed that IMRT is actually utilized more often in CON states than in non-CON states, with an odds ratio of 1.23 (95% CI 1.10-1.39, p<0.001). Conclusions: CON laws do not effectively limit use of IMRT in older or debilitated patients with low risk prostate cancer.

Certificate of Need Legislation and the Dissemination of Robotic Surgery for Prostate Cancer

The uncertainty about the incremental benefit of robotic prostatectomy and its higher associated costs makes it an ideal target for state based certificate of need laws, which have been enacted in several states. We studied the relationship between certificate of need laws and market level adoption of robotic prostatectomy. We used SEER (Surveillance, Epidemiology, and End Results)-Medicare data from 2003 through 2007 to identify men 66 years old or older treated with prostatectomy for prostate cancer. Using data from the American Health Planning Association, we categorized Health Service Areas according to the stringency of certificate of need regulations (ie low vs high stringency) presiding over that market. We assessed our outcomes (probability of adopting robotic prostatectomy and propensity for robotic prostatectomy use in adopting Health Service Areas) using Cox proportional hazards and Poisson regression models, respectively. Compared to low stringency markets, high stringency markets were more racially diverse (54% vs 15% nonwhite, p <0.01), and had similar population densities (886 vs 861 people per square mile, p = 0.97) and median incomes ($42,344 vs $39,770, p = 0.56). In general, both market types had an increase in the adoption and utilization of robotic prostatectomy. However, the probability of robotic prostatectomy adoption (p = 0.22) did not differ based on a market's certificate of need stringency and use was lower in high stringency markets (p <0.01). State based certificate of need regulations were ineffective in constraining robotic surgery adoption. Despite decreased use in high stringency markets, similar adoption rates suggest that other factors impact the diffusion of robotic prostatectomy.

131 CERTIFICATE OF NEED LAWS AND THE DIFFUSION OF INTENSITY-MODULATED RADIOTHERAPY

You have accessJournal of UrologyGeneral & Epidemiological Trends & Socioeconomics: Practice Patterns, Cost Effectiveness I1 Apr 2012131 CERTIFICATE OF NEED LAWS AND THE DIFFUSION OF INTENSITY-MODULATED RADIOTHERAPY Bruce L. Jacobs, Yun Zhang, and Brent K. Hollenbeck Bruce L. JacobsBruce L. Jacobs Ann Arbor, MI More articles by this author , Yun ZhangYun Zhang Ann Arbor, MI More articles by this author , and Brent K. HollenbeckBrent K. Hollenbeck Ann Arbor, MI More articles by this author View All Author Informationhttps://doi.org/10.1016/j.juro.2012.02.180AboutPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareFacebookTwitterLinked InEmail INTRODUCTION AND OBJECTIVES Intensity-modulated radiotherapy (IMRT) has disseminated rapidly, largely due to its purported improvements in cancer control and toxicity profile. While IMRT requires a substantial initial investment, it also creates opportunities for significant reimbursement, which raises the concern for overutilization. In this context, some states have implemented certificate of need laws (CONs), which have varying degrees of stringency, to curb the adoption of expensive, yet unproven services. How CONs affect the use of IMRT is unknown. We examined the dissemination of IMRT in markets with differing levels of CON stringency. METHODS We used Surveillance, Epidemiology, and End Results (SEER)-Medicare data to identify men diagnosed with prostate cancer between 2001 and 2007 who underwent treatment with radiation (n= 57,749), of which 23,545 had IMRT. We aggregated these data to Hospital Service Areas (HSAs), which represent local healthcare markets for hospital care. Information on CONs was obtained from the National Directory of Health Planning, Policy, and Regulatory Agencies. We categorized HSAs as markets having no CONs, low-stringency CONs (i.e., equipment threshold >$1.5 million), or high-stringency CONs (i.e., equipment threshold <$1.5 million). This cutoff was chosen due to the approximate cost of IMRT equipment. Our primary outcome was the adjusted proportion of IMRT among those patients receiving radiation in a given market. RESULTS After excluding markets with <10 patients treated with radiation in a given year, we identified 684 markets. The overall proportion of IMRT utilization was 35%, 44%, and 46% for no CON, low-stringency CON, and high-stringency CON markets, respectively (p<0.01). Over time, the adjusted proportion of patients treated with IMRT increased dramatically, regardless of CON regulation. For each year, markets with any form of CONs (i.e., high or low stringency) had similar use of IMRT, however both of these markets demonstrated higher utilization of IMRT than markets without CONs (p<0.01). CONCLUSIONS Any level of CON regulation, regardless of stringency, does not appear to inhibit the use of IMRT. Given IMRT's unproven benefits and favorable reimbursement, the failure of CONs to curb utilization raises concerns for overtreatment. © 2012 by American Urological Association Education and Research, Inc.FiguresReferencesRelatedDetails Volume 187Issue 4SApril 2012Page: e54 Advertisement Copyright & Permissions© 2012 by American Urological Association Education and Research, Inc.MetricsAuthor Information Bruce L. Jacobs Ann Arbor, MI More articles by this author Yun Zhang Ann Arbor, MI More articles by this author Brent K. Hollenbeck Ann Arbor, MI More articles by this author Expand All Advertisement Advertisement PDF DownloadLoading ...

Lobbying and the Adoption of Medical Technology Under Certificate of Need Laws

Lobbying and the Adoption of Medical Technology Under Certificate of Need Laws

Effect of US State Certificate of Need regulation of operating rooms on surgical resident training

Government regulation of health care services helps prevent costs associated with expansion and duplication of services in the United States. Certificate of Need (CON) helps restrict construction of ambulatory surgery facilities and hence controls delivery of surgical intervention, but concern exists about whether this affects resident exposure to an appropriate caseload. This study investigated how CON laws impact on surgical caseload as an index of resident surgical training. This retrospective study used State Inpatient Data compiled by the Health Care Utilization Project. Mean per capita rates of 26 diverse surgical procedures were evaluated in 21 states with CON laws and 5 states without between 2004 and 2006. The proportion of procedures performed in teaching facilities was also assessed. Student's t-tests were used to evaluate differences in these parameters between regulated and non-regulated states (a = 0.05). Multivariate analysis of variance permitted evaluation of the types of procedures that underwent shift in location performed. States with CON laws did not differ significantly in procedural rates for any of the investigated surgical procedures; however, such regulation was associated with different trends in teaching center caseload, depending on the type of procedure. Complex procedures, such as Whipple operations (p = 0.14) or resection of acoustic neuroma (p = 0.37), underwent no redistribution. Conversely, common procedures that might have previously been performed in private settings, such as total hip replacement (p = 0.003) or mastectomy (p = 0.01), did occur more commonly in teaching facilities under CON regulation. CON law did not result in relocation of surgical procedures away from teaching institutions. These results suggest that government regulations do not discriminate against teaching facilities. Surgical residents in states with such regulation gain similar or superior exposure to procedures as residents in states without such laws.

Federal Preemption of State Regulation Over Air Ambulances

Federal Preemption of State Regulation Over Air Ambulances

Impact of US state government regulation on patient access to elective surgical care

Rising health care costs in the United States have led to government regulation of services via a Certificate of Need (CON) law in many states. Such regulation may decrease access to elective surgical procedures. This study describes the impact of CON laws on elective surgical care. This retrospective cohort trial used data from the Health Care Utilization Project, a publicly available, inpatient database. Rates of six elective procedures were compared between 21 CON states and 5 non-CON states (2004-2005). Further, facility type (non-profit versus for-profit), facility teaching status, and median charges were also compared as a function of CON status. Statistical analysis was performed by Student's t-tests (?=0.05). CON laws did not affect procedure rates (P = 0.11-0.97), but lower charges were found for lumbar discectomy ($16,819 versus $13,493 p=0.04), acoustic neuroma resection ($60,993 versus $46,353, P < 0.001), and microvascular decompression (MVD) for trigeminal neuralgia ($37,741 versus $27,729, P < 0.001) in CON states. Various procedures exhibited a shift from for-profit to non-profit facilities including lumbar disectomy (20% versus 9%, P=0.01), acoustic neuroma resection (5.5% versus 0.2%, P=0.03), MVD (20% versus 3%, P=0.02), and rotator cuff repair (23% versus 10%, P=0.01). CON status had no effect on proportion of cases occurring at teaching facilities. CON laws appear to maintain patient access to elective surgical care while successfully reducing hospital charges. The location of surgery may shift to non-profit centers suggesting preferential certificate distribution, though this only partly explains the decreased charges in states with CON regulation.