Certificate of need

Map of US states that have Certificate-Of-Need laws.

Certificate of Need (CON) is a regulatory tool used by some states within the United States and by other nations globally to control healthcare costs and ensure the distribution of healthcare resources is aligned with community needs. The CON process requires healthcare providers to obtain state government approval before embarking on major capital investment projects such as the expansion of facilities, the opening of new services, or the acquisition of significant medical equipment.

History

The concept of the Certificate of Need originated in the early 1960s with the aim of restraining healthcare facility costs and allowing coordinated planning of new services and construction. Legislation at the federal level was first enacted in 1974 with the National Health Planning and Resources Development Act, which encouraged states to adopt CON programs. Although the federal mandate was repealed in 1986, many states continue to operate CON programs based on the belief that they can help prevent the overbuilding of facilities, avoid duplication of services, and ensure that high-quality healthcare services are available to all segments of the population.

Purpose and Rationale

The primary rationale behind the Certificate of Need is to:

• Prevent the proliferation of healthcare facilities and services that could lead to underutilization and increased healthcare costs.
• Ensure that new services or facilities meet a specific need within the community.
• Promote equitable distribution of healthcare resources, especially in underserved areas.
• Encourage the provision of high-quality healthcare services.

Process

The CON process varies by state but generally involves the submission of an application detailing the proposed project, its costs, and its expected impact on healthcare services in the community. Public hearings and reviews by state health planning agencies or similar bodies are common, with the final decision to approve or deny the application resting with a state health department or a designated CON board.

Criticism and Support

Critics of the Certificate of Need argue that it creates unnecessary barriers to market entry, stifles competition, and protects existing healthcare providers from new entrants. They contend that a free-market approach would better control costs and improve quality through competition. Supporters, however, believe that without CON regulations, healthcare providers might focus on high-income areas and profitable services, leading to disparities in healthcare access and an increase in overall healthcare costs due to facility duplication and underutilization.

Current Status

As of the last update, the number of states implementing CON laws has fluctuated, with some states repealing their CON laws and others considering their reinstatement. The effectiveness and impact of CON laws continue to be a subject of debate among policymakers, healthcare providers, and the public.

See Also

• Healthcare in the United States
• Healthcare economics
• Public health