Certificate-of-Need laws in healthcare: A comprehensive review of the literature

Certificate-of-Need (CON) laws limit the supply of healthcare services in about two-thirds of U.S. states. The regulations require those who wish to open or expand their facilities to first prove that their services are needed. Once encouraged by the federal government, Congress eliminated the inducement in the 1980s and since then several states have either pared their CON programs back or eliminated them altogether. To date, there have been 128 academic assessments of CON laws and together these papers contain over 450 tests. In this paper, I review this literature, organizing the results around the most common rationales for CON laws. The accumulated evidence is overwhelming that CON laws do not achieve their purpose. Instead, the balance of evidence suggests that these regulations increase spending, reduce access to care, undermine quality, and fail to ensure care for underserved populations.