CON Laws: The Latest Research
A new meta-analysis by Matthew D. Mitchell, Ph.D., a Senior Fellow at West Virginia University’s Knee Regulatory Research Center covers 128 academic papers, containing 450 tests, concerning Certificate of Need (CON) laws. Supporters of CON laws advocate for them based on various supposed benefits, including reduced healthcare spending, improved access to care, improved quality, better provisioning of care for underserved populations, and fostering competition. We will go through each of these areas and summarize what Dr. Mitchell found. First, though, let’s define Certificate of Need.
What are Certificate of Need Laws?
Certificate of Need (CON) laws are regulatory measures that require healthcare providers to obtain state approval before initiating certain projects, such as building new facilities, expanding existing ones, or purchasing expensive medical equipment. These laws differ from state to state. In some states, dozens of different healthcare services are regulated by these laws while in others only some services are regulated, and in still others none are regulated by CON laws at all. In another publication by Dr. Mitchell, 30 types of healthcare services are examined. Hawai’i requires Certificates of Need for nearly all of them, 28, while Utah, among others, doesn’t require certificates for any of them. West Virginia demands certificates from 23 of the 30 examined. The most common target of Certificate of Need laws, according to this research, is nursing home beds.
Effects of CON Laws
As mentioned above, this sweeping meta-analysis looks at the effects of Certificate of Need laws in each area commonly cited by the law’s proponents. Let’s look at what this research finds.
CON Laws and Spending
Certificate of Need laws are supposed to rein in spending. This research examines spending per service rendered and per capita health care spending. Of 45 tests concerned with spending per service rendered, 27 of them (60%) find CON laws associated with higher costs per service rendered, 15 (33%) find no impact on per service cost, and only 3 (7%) are associated with lower costs per service.
Meanwhile, 52 of the tests covered in this meta-analysis concern per capita (per patient or per person) healthcare spending. Of these, 23 (44%) associate CON laws with higher per capita spending, 21 (40%) find an insignificant effect and only 8 (15%) find CON laws paired with lower per capita spending. From this overview of the research, there is no reason to believe Certificate of Need laws reduce healthcare spending.
CON Laws and Access
Eighty-three tests examined by this research deal with the availability of healthcare services. Of these, 65 (78%) associate CON laws with diminished availability of services, 12 (14%) find a negligible effect, and only 6 (7%) find CON laws associated with greater availability.
Concerning the utilization of healthcare services, results are mixed. 60 (56%) of the 107 tests examined found insignificant effects on utilization, while 34 (32%) found diminished utilization and 13 (12%) found increased utilization. When it comes to Certificate of Need and access to care, the research points toward decreased access for areas governed by these regulations.
CON Laws and Quality
Theory around CON laws would state that by restricting the supply of providers, providers would render more services, and therefore become better at rendering those services. Does that pan out? Of 114 tests examined, only 20 (18%) found CON associated with better quality healthcare services. Fifty (44%) tests find the inverse: CON laws paired with diminished quality of care. Another 44 (39%) find neutral or insignificant results. Per the author, nearly three times as many tests associate CON with lower quality outcomes as with higher quality.
CON Laws and Underserved Populations
By restricting where health investment can be made, Certificate of Need laws may push investment that providers desire to make out into underserved communities. Does the research support this theory? Unfortunately, no. Of 17 tests examining the relationship between CON laws and the provision of services to underserved populations, none of them (0%) found positive effects. Fourteen (82%) found the opposite, with Certificate of Need laws negatively impacting healthcare access in underserved communities. Three (18%) found insignificant effects.
CON Laws and Competition
In terms of healthcare competition, that is competition between providers, results are mixed. Out of 5 tests, 3 associate Certificate of Need laws with less competition and 2 with increased competition.
CONclusion
Across 450 different examinations testing the efficacy of Certificate of Need laws in the domains most cited by their proponents, we simply do not see the sort of results promised and often see exactly the opposite. The government should allow providers to determine where to offer services and the quantity in which to offer those services. As mentioned above, West Virginia regulates the majority of healthcare services in the Mountain State with these laws that research shows are so damaging. In 2024, the legislature should work on removing this regulatory burden from healthcare providers. The evidence overwhelmingly suggests that doing so could pave the way for more affordable, accessible, and higher-quality healthcare in West Virginia.
