The Mississippi House of Representatives has passed a bill to remove Certificate of Need (CON) requirements for many health care services and increase the amount a provider can spend before having to get permission from the state. The bill would also provide a faster appeal process for when proposals are denied approval.
CON laws are intended to reduce costs and improve access to health care by controlling the availability of medical facilities through state-based regulation. Unfortunately, CON laws decrease health care access, raise costs, lower quality, and stifle innovation by giving competing health care providers veto power over the construction or improvement of facilities or other capital improvements such as advanced imaging devices.
HB 922, introduced by State Rep. Hank Zuber (R), “would remove birthing centers, chemical dependency facilities, intermediate care facilities, and psychiatric care residential treatment facilities from the CON process upon the Governor’s signature,” the Magnolia Tribune reports. “In addition, after July 1, 2029, hospital-based dialysis facilities, MRI services, and invasive diagnostic imaging services would be exempted from the CON process.”
The bill passed the House with broad bipartisan support, on a vote of 107-5. It is now under consideration in the Mississippi Senate.
This CON reform, though limited, would improve access to health care in Mississippi while putting beneficial pressures on costs and quality by encouraging greater investment in new facilities and improvements of existing ones.
Patients and the public health benefit when states reduce regulatory barriers to the construction of new health care facilities. Years of evidence clearly show the free market does a better job of controlling costs and at least as good a job at ensuring people have access to health care as CON laws do.
In September 2024 testimony before the Mississippi House Select Committee on Healthcare Reform, Mercatus Center scholar Thomas Stratmann stated repeal of Mississippi’s CON laws would improve the quality of care and could increase the number of hospitals in the state from 116 to 165 (an increase of nearly one-third) and raise the number of rural hospitals from 74 to 106. The study also found the number of MRI scans available to residents of Mississippi would increase by about one-third.
As the research shows, CON laws do the opposite of what they are intended to do. In the 1960s, policymakers began to worry that the free market would concentrate lucrative medical services in some areas while creating an undersupply of services everywhere else. Beginning in 1964 with New York and extending to nearly every state throughout the 1980s, legislatures began to control the licensing of new facilities. In 1987, federal mandates requiring CON were removed. Since then, states have begun to reform and repeal their CON laws as many legislatures have determined that rationing health care in this way has done more harm than good.
Currently, 35 states and the District of Columbia require care providers to go through a CON approval process before constructing a facility or in some cases even buying certain equipment such as imaging machines. As of 2024, 12 states had completely repealed their CON laws.
The following documents provide additional information about Certificate of Need policy:
Do Certificate of Need Laws Limit Spending?
Matthew Mitchel from the Mercatus Center examines cost implications of Certificate of Need laws across the health care system.
The Failure of Mississippi’s Certificate-of-Need Laws
Thomas Stratmann of the Mercatus Center describes what CON repeal could accomplish for Mississippi, in testimony before the Mississippi House of Representatives Select Committee on Healthcare Reform Hearing on Certificate of Need.
2022 Testimony on the South Carolina Certificate of Need Repeal
Matt Dean of the Heartland Institute testified about a South Carolina bill to repeal CON.
Certificate of Need (CON) State Laws
The National Conference of State Legislatures provides a state-by-state update on Certificate-of-Need laws with an interactive map.
CON Laws in 2020: About the Update
Matthew Mitchell and Anne Philpot of the Mercatus Center update the CON legislative landscape and provide context for state policy reforms.
Tearing Down Regulations That Restrict the Supply Of Health Care Has Become Bipartisan
Policy reporter Patrick Gleason examines the political currents and crosscurrents that created rare bipartisanship in favor of CON repeal.
Certificate of Need Laws; A Systematic Review and Cost-Effectiveness Analysis
Christopher Conover and James Bailey from BCM Health Services provide an analysis of 90 studies of the effectiveness of CON legislation in the states.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.
S. T. Karnick is a senior fellow and director of publications for The Heartland Institute.
