ADVOCACY SPOTLIGHT
The Debate on Certificate of Need Supporters and opponents make their case BY COLLEEN THORNTON
T
hirty-six states, the District of Columbia and Puerto Rico have
some variation of a Certificate of Need (CON) program in place. The National Conference of State Legislatures (NCSL) states that these programs are aimed at restraining health care facil- ity costs and allowing coordinated plan- ning of new services and construction. With this goal in mind, every varia- tion of a CON program stems from a state’s desire to reduce health and medi- cal costs. Even the 14 states that do not have CON regulations in place make efforts to control costs and prevent duplicate services. While the programs come from good intentions, they have emerged as a topic of debate among health care profession- als. There are a great number of propo- nents and an equal number of opponents of the requirements and policies set in place by CON programs. Those who oppose CON programs
have a number of reasons why. Their argument
starts with research from
sources such as the Federal Trade Com- mission and the Department of Justice, that say it is not clear that these state- sponsored programs actually control health care costs. They also state that CONs prevent competition. These two arguments go hand in hand—by prevent- ing competition among health care pro- viders a CON allows a single provider within an area to charge whatever price it deems necessary because it is the only provider available. Price competition is eliminated, and prices are kept higher. Opponents also view the restrictions placed on the creation of new medi- cal services, such as an ASC, as unfair. They assert that there is little direct proof that increased capacity or dupli- cation of services leads to higher costs. Another argument is the lack of con- sistency among CON programs. State control of the creation and regulation of
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medical services adds a political aspect to health care. Those opposed to CONs feel that health facility development and regulation should be left to the econom- ics of each institution. A big driver of the debate for them is a matter of what sort of development is actually in the com- munity’s interest. Opponents feel this debate should be left to the community rather than the state.
On the opposite side of the debate, proponents of CONs say that health care is not a normal economic product that a consumer can “shop” for. Health care services do not follow the same rules as other markets. They argue that because physicians order a treatment for a patient, the patient is not shop- ping the way they would for items such as clothing or groceries. Therefore, they suggest a regulatory approach based on
public interest. Three factors support the necessity of CONs, according to the American Health Planning Associa- tion (AHPA). Its primary argument for CONs is to limit health-care spending. In monitoring the construction and pur- chasing of new facilities and expensive equipment, state governments have the ability to help determine what expenses are necessary and where funds can be allocated
effectively. This regulation
allows for fewer duplicate services within a geographic area, which, in turn reduces excessive spending. In addition, APHA states that CONs
have an impact on quality of care. Limit- ing the equipment within an area forces a health service provider to acknowl- edge the care that its facility is capa- ble of giving. For example, if only one location within a geographic area has
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