Policy Documents

Taking the CON Out of Health Care Costs

Robert A. Lawson –
January 4, 2001

In this executive summary from Heartand from the Buckeye Institute, Robert Lawson asks us to suppose an Ohio hospital wants to purchase a new magnetic resonance imagin (MRI) machine or wants to add more beds to its maternity or obstetric unit. Or suppose a new cardiac catheterization lab wants to open. 

In Ohio, these health care improvements would be prohibited. In the debate over health care, virtually all sides agree that medical services in this country are not available to enough people, especially the middle class and poor. So, why is the state preventing the expansion of health care services to more citizens? Many health care experts believe limiting the ability of health care facilities to expand is necessary to prevent costly oversupply and so-called “duplication of services.” But by restricting the supply of services, the regulations in fact limit consumer choice and increase the ability of health care providers to raise prices above competitive market levels.

Certificate of Need (CON) regulation requires that many new medical services receive a license, called a Certificate of Need, before being established. In fact, a moratorium currently exists on new certificates for several useful medical services: MRI units, cardiac catheterization units for low-risk patients, and obstetric and newborn care beds, among others.