The Leaflet: States Reconsider CON Laws

Published March 12, 2015

States Reconsider CON Laws

Certificate of need (CON) laws were originally introduced to the United States in 1964 by New York State, and 36 states now have certificate of need laws that are meant to slow the growth of health care prices, promote consolidation of health care providers, and limit the duplication of services. Recent studies have shown CON laws fail to achieve many of their stated goals and have instead reduced the availability of health care services. 

As a result of the negative outcomes caused by CON laws, states such as Georgia, Maine, New Hampshire, North Carolina, South Carolina, and Virginia are all looking to roll back parts or all of their CON laws in an attempt to reduce health care costs, increase competition, and allow the free market to operate unimpeded by costly government reforms. Indiana is the only state without a CON law currently considering a bill that would impose a CON-like moratorium.

Data from the Kaiser Family Foundation show health care costs are 11 percent higher in CON states than in non-CON states. The study also found a positive correlation between the number of CON law restrictions and the cost of health care. States requiring certificates of need on 10 or more services averaged per capita health care costs 8 percent higher than the $6,837 average for states requiring certificates of need for fewer than 10 services.

CON laws also give inappropriate influence to competitors during vetting processes. When a company applies to enter a new market, competitors often use the CON process to block potential competition. CON laws raise the price of medical care by preventing new medical providers from competing with existing hospitals. The negative effects of CON laws are leading many experts and lawmakers around the country to call for their repeal or reform.

Heartland’s government relations team stands ready to assist you with all of your policy needs at a moment’s notice. If you would like more information about CON laws or any other issues, please don’t hesitate to contact us at 312/377-4000 or by e-mail at [email protected].

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