Advancing Certificate-of-Need Reform in Tennessee
44 Pages Posted: 18 Nov 2021
Date Written: October 12, 2021
Abstract
The modern aim of certificate-of-need laws is to decrease healthcare costs, improve healthcare quality, and increase access to healthcare by restricting healthcare expenditures. But, by empowering incumbent healthcare providers to restrict competition, they can also increase healthcare costs, decrease quality, and decrease access to healthcare. This paper reviews the evidence on the effectiveness of CON laws and finds that they overwhelmingly tend to fail to achieve their stated ends. Furthermore, most healthcare services covered by CON laws in Tennessee lack convincing empirical justification, especially taking into consideration the possibility for heightened demand for healthcare facilities in response to global pandemics, natural disasters, and acts of terrorism. Tennessee policymakers can improve healthcare cost, quality, and access for Tennesseans, and help Tennessee prepare for future pandemics, by further reforming CON laws. This paper reviews a range of possible reforms from complete removal of CON laws to the adoption of healthcare facility licensing.
Keywords: Certificate-of-need, healthcare, Tennessee
JEL Classification: I180
Suggested Citation: Suggested Citation