CON Laws are Ineffective, Arbitrary Regulations

  • Initially implemented as purported cost and quality control measures, Certificate of Need (CON) laws actually increase expenses and limit access to healthcare options for patients.  
  • CON laws require medical facilities—such as hospitals, nursing homes, birth centers, and more—to get approval from the state to open or expand their services.
  • While Congress passed the National Health Planning and Resources Development Act, requiring states to adopt CON laws in 1974, it repealed the mandate just 12 years later due to CON laws not achieving their intended goals. 

CON Laws Elevate Healthcare Costs

  • Complicating the process and increasing the cost of applying, CON laws create barriers for healthcare facilities to open or expand.
  • Many states have incredibly high costs for a CON application alone. For example, interested parties can expect to spend an average of $15,774 applying in Iowa without a guarantee of approval. 
  • States with CON laws have 30% fewer hospitals, and consequently, 10% higher variable costs in general acute hospitals, 20.6% higher expenditures per capita, higher Medicare and Medicaid costs, and worse quality of care. 

States Should Reform and Repeal CON Laws

  • Most CON laws permit existing facilities to protect their market by objecting to applications through submitting public comments, requesting hearings, or even litigating to delay or block an application.
  • Though states adopted CON laws to prevent an oversupply of services and ensure that healthcare facilities were more evenly distributed across populations, CON laws have failed to accomplish these objectives.
  • States that do not have CON see expanded access, lower costs, and improved care compared to states that do. Removing CON means that providers will be able to respond to the needs of their patients, and all Americans will have an easier time finding the care they need in their community without breaking the bank.

Click HERE to read the policy focus and learn more about Certificate of Need laws.