Certificate Of Need Regulations Research Articles

Does certificate of need affect cardiac outcomes and costs?

Several U.S. states enforce Certificate of Need (CON) regulations, which limit the number of hospitals performing open heart surgery or coronary angioplasty. CON regulations were intended to restrain cost growth and improve quality of care. This study compares mortality rates and costs for cardiac care in states with and without CON. CON appears to raise hospital procedure volume and lower the average cost of care. However, CON is associated with little reduction in inpatient mortality, and it may lead hospitals to operate on more patients than they would otherwise. The claimed welfare benefits of CON regulations require careful reconsideration.

Certificate of Need Regulation and Cardiac Catheterization Appropriateness After Acute Myocardial Infarction

Certificate of need (CON) regulation was introduced to control healthcare costs and improve quality of care in part by limiting the number of facilities providing complex medical care. Our objective was to examine whether rates of appropriate cardiac catheterization after admission for acute myocardial infarction varied between states with and without CON regulation of cardiac catheterization. We performed a retrospective analysis of chart-abstracted data for 137,279 Medicare patients admitted for acute myocardial infarction between 1994 and 1996 at 4179 US acute-care hospitals. Using 3-level hierarchical generalized linear modeling adjusted for patient sociodemographic and clinical characteristics and physician and hospital characteristics, we compared catheterization rates within 60 days of admission for states (and the District of Columbia) with (n=32) and without (n=19) CON regulation in the full cohort and stratified by catheterization appropriateness. Appropriateness was categorized as strongly, equivocally, or weakly indicated. We found CON regulation was associated with a borderline-significant lower rate of catheterization overall (45.8% versus 46.5%; adjusted risk ratio [RR] 0.91, 95% confidence interval 0.82 to 1.00, P=0.06). After stratification by appropriateness, CON regulation was not associated with a significantly lower rate of catheterization among 63,823 patients with strong indications (49.9% versus 50.3%; adjusted RR 0.94, 95% confidence interval 0.86 to 1.02, P=0.17). However, CON regulation was associated with significantly lower rates of catheterization among 65,077 patients with equivocal indication (45.0% versus 46.0%; adjusted RR 0.88, 95% confidence interval 0.78 to 1.00, P=0.05) and among 8379 patients with weak indications (19.8% versus 21.8%; adjusted RR 0.84, 95% confidence interval 0.71 to 0.98, P=0.04). Associations were weakened substantially after adjustment for hospital coronary artery bypass graft surgery or cardiac catheterization capability. CON regulation was associated with modestly lower rates of equivocally and weakly indicated cardiac catheterization after admission for acute myocardial infarction, but no significant differences existed in rates of strongly indicated catheterization.

Does Government Regulation Enhance Quality of Cardiovascular Procedures?

Cardiovascular specialists encumbered with excessive intrusion into the patient-doctor relationship will likely agree with the conclusion of DiSesa et al1 that the coronary artery bypass grafting (CABG) mortality rate was not different between the 26 states with certificate-of-need (CON) programs and the 24 states without CON regulation. Data from the Society of Thoracic Surgeons’ (STS) National Cardiac Database (NCD) on 595 200 patients undergoing isolated CABG procedures for 4 consecutive years ending in 2003 used the STS NCD risk-stratification algorithm to predict an equivalent occurrence of death after CABG during hospitalization or within 30 days for both the 280 512 patients treated in non-CON states and the 314 710 patients treated CON states (Table 5 in DiSesa et al1). The observed perioperative CABG mortality rate was 2.52% for CON states and 2.62% for states without CON regulations (odds ratio [OR]=0.97, P =0.32). Article p 2122 Text in italics below represents the reflections of a hypothetical potential CABG patient. This artificial dialog was created to help cardiovascular specialists keep the patient at the center of our frame of reference when evaluating any quality-of-patient-care program. Although Dr Jones penned these words, he is not now and hopes never to be a potential CABG patient. From the perspective of an informed patient in need of CABG, my concern is that before operation, patients in both CON and non-CON states were expected to have the same operative risk, and yet an additional 1 out of 1000 patients died in non-CON states compared with CON states. One out of 1000 extra deaths does not seem like much extra risk unless you are the prospective patient. If I lived in Kansas City, Kan, …

Contemporary Impact of State Certificate-of-Need Regulations for Cardiac Surgery

Prior research using administrative data associated certificate-of-need (CON) regulation for open heart surgery with higher hospital coronary artery bypass grafting (CABG) volume and lower CABG operative mortality rates in elderly patients. It is unclear whether these findings apply in a general population and after controlling for detailed clinical characteristics and region. Using the Society of Thoracic Surgeons' (STS) National Cardiac Surgery Database, we examined isolated CABG surgery volume, operative mortality, and the composite end point of operative mortality or major morbidity for the years 2000 to 2003. The presence of CON regulations for open heart surgery was ascertained from the National Directory of the American Health Policy Association and by contacting CON administrators. Results were analyzed nationally, by state, and by region (West, Northeast, Midwest, South) and were adjusted for clinical factors and both population density and region with mixed-effects hierarchical logistic regression models. During 2000 to 2003, there were 314,710 isolated CABG surgeries performed at 294 STS hospitals in CON states (n=27, including Washington, DC) and 280 512 procedures at 343 STS hospitals in non-CON states (n=24). Patient clinical characteristics were similar among CON and non-CON hospitals. States with CON regulations tended to have higher population densities and had significantly higher median hospital annual CABG volumes in each of the years 2000 to 2003 (P<0.005). This difference remained significant after adjustment for region and population density. Operative mortality was 2.52% for CON versus 2.62% for non-CON states (P=0.32). There was a significant association between CON law and operative mortality in the South. After adjustment for patient risk factors and region, there was a marginally significant reduction of mortality risk in states with CON regulation (adjusted OR 0.92, 95% CI 0.86 to 1.00). However, this difference was not statistically significant when a revised model accounted for random state effects. Similar volume and outcomes results were seen when the analysis was repeated with data from the national Medicare database. CON states have significantly higher hospital CABG surgery volumes but similar mortality compared with non-CON states. CON regulation alone is not a sufficient mechanism to ensure quality of care for CABG surgery.

Certificate of Need Regulations and Use of Coronary Revascularization After Acute Myocardial Infarction

Certificate of need regulations were enacted to control health care costs by limiting unnecessary expansion of services. While many states have repealed certificate of need regulations in recent years, few analyses have examined relationships between certificate of need regulations and outcomes of care. To compare rates of coronary revascularization and mortality after acute myocardial infarction in states with and without certificate of need regulations. Retrospective cohort study of 1,139,792 Medicare beneficiaries aged 68 years or older with AMI who were admitted to 4587 US hospitals during 2000-2003. Thirty-day risk-adjusted rates of coronary revascularization with either coronary artery bypass graft surgery or percutaneous coronary intervention and 30-day all-cause mortality. The 624,421 patients in states with certificate of need regulations were less likely to be admitted to hospitals with coronary revascularization services (321,573 [51.5%] vs 323,695 [62.8%]; P<.001) or to undergo revascularization at the admitting hospital (163,120 [26.1%] vs 163,877 [31.8%]; P<.001) than patients in states without certificates of need but were more likely to undergo revascularization at a transfer hospital (73,379 [11.7%] vs 45,907 [8.9%]; P<.001). Adjusting for demographic and clinical risk factors, patients in states with highly and moderately stringent certificate of need regulations, respectively, were less likely to undergo revascularization within the first 2 days (adjusted hazard ratios, 0.68; 95% confidence interval [CI], 0.54-0.87; P = .002 and 0.80; 95% CI, 0.71-0.90; P<.001) relative to patients in states without certificates of need, although no differences in the likelihood of revascularization were observed during days 3 through 30. Unadjusted 30-day mortality was similar in states with and without certificates of need (109,304 [17.5%] vs 90,104 [17.5%]; P = .76), as was adjusted mortality (odds ratio, 1.00; 95% CI, 0.97-1.03; P = .90). Patients with acute myocardial infarction were less likely to be admitted to hospitals offering coronary revascularization and to undergo early revascularization in states with certificate of need regulations. However, differences in the availability and use of revascularization therapies were not associated with mortality.

Certificate-of-Need Regulation in Outpatient Surgery and Specialty Care: Implications for Plastic Surgeons

For plastic surgeons, independent development of outpatient surgical centers and specialty facilities is becoming increasingly common. These facilities serve as important avenues not only for increasing access and efficiency but in maintaining a sustainable, competitive specialty advantage. Certificate of Need regulation represents a major hurdle to plastic surgeons who attempt to create autonomy in this fashion. At the state level, Certificate of Need programs were initially established in an effort to reduce health care costs by preventing unnecessary capital outlays for facility expansion (i.e., managing supply of health care resources) in addition to assisting with patient safety and access to care. The purpose of this study was to examine the effect of Certificate of Need regulations on health care costs, patient safety, and access to care and to discuss specific implications of these regulations for plastic surgeons. Within Certificate of Need states, these regulations have done little, if anything, to control health care costs or affect patient safety. Presently, Certificate of Need effects coupled with recent provisions in the Medicare Modernization Act banning development of specialty hospitals may restrict patient access to ambulatory surgical and specialty care. For the plastic surgeon, these effects not only act as an economic barrier to entry but can threaten the efficiencies gained from providing surgical care in an ambulatory setting. An appreciation of these effects is critical to maintaining specialty autonomy and access to fiscal policy.

Certificate of Need Regulations and Hospital Mortality—Reply

Certificate of Need Regulations and Hospital Mortality—Reply

Mortality in medicare beneficiaries following coronary artery bypass graft surgery in states with and without certificate of need regulation

Few studies have analyzed the effect of venous thromboembolism (VTE) events on the prognosis of pancreatic cancer, but their results were conflicting. The present study was undertaken to determine the effect of VTE on pancreatic adenocarcinoma (PA) outcomes.All consecutive patients diagnosed with PA from May 2004 to January 2012 in a single oncology center were retrospectively studied. Clinical, radiological and histological data at time of diagnosis or within the first 3 months after surgery, including the presence (+) or absence (−) of VTE were collected. VTE was defined as radiological evidence of either pulmonary embolism (PE), deep venous thrombosis without infection or catheter-related thrombosis. PA with and without PE was compared for survival using the Kaplan-Meier method to estimate overall survival.Among 162 PA patients with a median follow-up of 15 (3-92) months after diagnosis, 28 demonstrated VTE (+). PA patients with and without PE were similar for age, American Society of Anesthesiologist score, body mass index, and history of treatment. The distribution of cancer stages was similar between the two groups VTE (+) and VTE (−). The median duration of survival was significantly worse in the VTE (+) group vs VTE (−) (12 vs 18 months, P=0.010). In multivariate analysis, the presence of VTE and surgical treatment were independent prognostic factors for overall survival.VTE (+) at time of diagnosis or within the first 3 months after surgery during treatment is an independent factor of poor prognosis in PA.

Mortality in Medicare beneficiaries following coronary artery bypass graft surgery in states with and without certificate of need regulation.

Certificate of need regulation was designed to control health care costs by preventing health care facilities from expanding unnecessarily. While there have been several studies investigating whether these regulations have affected health care investment, few have evaluated the relationship between certificate of need regulation and quality of care. To compare risk-adjusted mortality and hospital volumes for coronary artery bypass graft (CABG) surgery in states with and without certificate of need regulation. Retrospective cohort study of 911 407 Medicare beneficiaries aged 65 years or older, who underwent CABG surgery between 1994 and 1999 in 1063 US hospitals. States (and the District of Columbia) with continuous (n = 27), none (n = 18), or intermittent (n = 6) certificate of need regulation; mortality (in-hospital or within 30 days of CABG surgery) rates; and mean annual hospital volumes for CABG surgery. Unadjusted mortality was 5.1% in states without certificate of need regulation compared with 4.4% in states with continuous regulation, and 4.3% in states with intermittent certificate of need regulation (P<.001 for each comparison). Adjusting for demographic and clinical factors, mortality remained higher in states without certificate of need regulation compared with states with continuous certificate of need regulation (odds ratio [OR], 1.22; 95% confidence interval [CI], 1.15-1.28; P<.001). Using the same groups for comparison, the mean annual hospital volume for CABG surgery was 84% lower in states without certificate of need regulation (104 vs 191; P<.001) and more patients underwent CABG surgery in low-volume hospitals (<100 procedures annually) (30% vs 10% for states with continuous certificate of need programs; P<.001). Following the repeal of certificate of need regulation in states categorized as intermittent, the percentage of patients undergoing CABG surgery in low-volume hospitals tripled. Mortality rates for Medicare patients undergoing CABG surgery were higher in states without certificate of need regulation. Repeal of certificate of need regulations during the study period was associated with declines in hospital volume for CABG surgery.

The competitive nature of the nursing home industry: price mark ups and demand elasticities

Nursing home markets are likely to deviate from a competitive structure because of limitations on entry imposed by Certificate of Need (CON) regulations and the potential for product differentiation along such attributes as location, religious affiliation and quality. This paper investigates the structure of nursing home markets in New York State by calculating price mark ups and residual private pay demand elasticities. It shows that the residual demand elasticity is bound by estimates based on price mark ups above marginal costs and above Medicaid rates. This approach allows estimation of demand elasticities in all markets, whether or not CON regulations constrain bed supply. Mean price elasticities (in absolute value) calculated for nursing homes in New York State in 1991 ranged from 3.46 to 3.85.

Does removing certificate-of-need regulations lead to a surge in health care spending?

This study assesses the impact of certificate-of-need (CON) regulation for hospitals on various measures of health spending per capita, hospital supply, diffusion of technology, and hospital industry organization. Using a time series cross-sectional methodology, we estimate the net impact of CON policies on costs, supply, technology diffusion, and industry organization, controlling for area characteristics, the presence of other forms of regulation, such as hospital rate-setting, and competition. Mature CON programs are associated with a modest (5 percent) long-term reduction in acute care spending per capita, but not with a significant reduction in total per capita spending. There is no evidence of a surge in acquisition of facilities or in costs following removal of CON regulations. Mature CON programs also result in a slight (2 percent) reduction in bed supply but higher costs per day and per admission, along with higher hospital profits. CON regulations generally have no detectable effect on diffusion of various hospital-based technologies. It is doubtful that CON regulations have had much effect on quality of care, positive or negative. Such regulations may have improved access, but there is little empirical evidence to document this.

Certificate-of-Need Regulation and Entry: Evidence from the Dialysis Industry

Certificate-of-need (CON) regulation is widely used in the health care industry.1 The primary alleged purpose of this regulatory tool is to reduce industry costs by preventing unnecessary duplication of facilities.2 While specific CON regulations vary from state to state, virtually all require new firms planning to enter the industry and incumbent firms planning an expansion of productive capacity to submit an application in which the applicant must demonstrate: (1) a market demand (or need) for the incremental output, investment, or new service being proposed, and (2) the inability or unwillingness of existing firms to meet that demand with facilities already in place. Moreover, incumbent firms are offered the opportunity to formally intervene during the CON review process to express their opposition to the proposed entry or expansion plans. Economists have long been skeptical of this form of regulation. At least three fundamental reasons underlie this skepticism. First, private investors are likely to have vastly superior information to that held by regulators on the need for new capacity. These investors are much more familiar with industry conditions than regulators, and they are placing their own money at risk by entering and/or expanding. Second, given the obvious incentive of existing firms to oppose virtually any entry, expansion of capacity, or introduction of new services by competitors and the fact that this policy provides an open forum for such opposition, the likelihood that CON regulation actually serves the interests of consumers by fostering lower industry costs is remote. And third, to the extent that CON regulation is effective in reducing net investment in the industry, the economic effect is to shift the supply curve of the affected service back to the left. Since most medical services are thought to exhibit inelastic demand (due to the general unavailability

Certificate-of-Need Deregulation and Indigent Hospital Care

For almost twenty years certificate-of-need (CON) regulations have protected existing hospitals from unrestricted competition in services. Although the explicit purpose of CON regulation was to prevent hospitals from duplicating services and investing in costly excess capacity, it has been unsuccessful in accomplishing this goal. On the other hand, CON policies have, we suggest, been pursued with the implicit aim of "cross subsidization," that is, regulators have used their power to issue licenses and restrict competition in order to create an incentive to hospitals to provide high levels of care to the indigent population. Posner (1971) has noted that to achieve cross subsidization, entry into lucrative services must be restricted. We present evidence that CON licenses have been used to promote the internal subsidization of indigent care in probit analysis, based on data from Florida spanning the period 1983-89. While this method of financing indigent care may be preferred by legislators who do not want to face the political consequences of raising taxes to pay for the service, it has troubling implications for the hospital provision of indigent care, especially in an era of CON deregulation.

Regulation, Market Structure, and Hospital Costs

During the past decade a host of studies of hospital costs have appeared in the literature. These papers have led to several fundamental advances in our understanding of the nature of hospital costs.' Yet despite these advances, considerable controversy remains about the impacts of regulation and market structure on hospital costs. For instance, proponents of certificate-of-need (CON) regulation have argued that the effects of regulating hospital capital expansion programs will be to reduce, if not eliminate, what is seen as a chronic tendency on the part of hospitals to over-build. Others, for example Sloan and Steinwald [14], have argued that CON regulation has generally not reduced costs and may have actually increased hospital costs in cases where CON regulation has been designed primarily to control bed expansion. The purpose of this paper, then, is to shed light on some of these unresolved issues surrounding the impacts of regulation and market structure on hospital costs. With the benefit of a more general theoretical approach and a novel data set, we determine that, in recent years, CON regulation has acted to constrain hospital bed growth and hospital costs, while market concentration acts, ceteris paribus, to increase firm costs.

Issues and opportunities in the regulation of home health care

Recent federal legislation established a Certificate of Need (CON) process by which health care providers must receive state approval before building or renovating a facility, or adding a new service. Certainly, strict regulation of cost and quality of home health care is needed, but it is asserted that CON is an ineffective way of organizing the delivery of services and limiting costs, and furthermore, that CON is biased in favor of institutionally-based providers and maintenance of the status quo. The authors feel that vested interests have a history of trying to use earlier state CON regulations to control their turf, limit competition, and consequently stifle innovation. Home health care should be incorporated into national health planning goals and integrated into state and regional health plans. Such planning must precede CON regulations and should not be confused with it. Alternatives to CON can achieve quality service and moderate costs and include licensing of personnel, standards for provider accreditation, and utilization review. Planning for these alternatives should begin now to avoid fragmented expansion of home health care. Evidence suggests a comprehensive use of home health care as a cost-effective alternative for many levels of care given in hospitals and nursing homes.