Certificate Of Need

Certificate of Need is a process that some states require a healthcare facility go through before they start construction on a new facility, or start expanding an existing facility. The idea behind CON is that overbuilding facilities leads to higher healthcare costs, so the demand must exist to support all facilities before they're built. The fear is that having empty beds in a hospital makes the filled beds more expensive.

The Health Planning Resources Development Act from 1974, passed on a federal level, prompted this act for many states. In 1987, it was repealed, and some states just quit mandating the process. 34 states still followed it the program in 2016.

You might be thinking this limits choice; just because someone lives in a less populated area doesn’t mean they should have limited choices if a hospital wants to build there, right? Another complaint is that this allows for unfair manipulation. What if the biggest hospital in the area has a politician on their side...won’t they get more favorable treatment from the state? Ideally not...but that’s "ideally."

Another complaint is that each state is not administered the same way (in fact, some don’t do this at all) so it could drive healthcare providers to favor building in some states more than others, again leading to disproportionate access. On the other hand, CON is intended to distribute resources evenly and to to control costs, so when it works, it benefits everyone.