Advancing Certificate-of-Need Reform in Tennessee

44 Pages Posted: 18 Nov 2021

See all articles by Daniel J. Smith

Daniel J. Smith

Middle Tennessee State University - Department of Economics and Finance; Middle Tennessee State University - Jennings A. Jones College of Business

Macy Scheck

Political Economy Research Institute at Middle Tennessee State University

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

Smith, Daniel J. and Scheck, Macy, Advancing Certificate-of-Need Reform in Tennessee (October 12, 2021). Available at SSRN: https://ssrn.com/abstract=3941209 or http://dx.doi.org/10.2139/ssrn.3941209

Daniel J. Smith (Contact Author)

Middle Tennessee State University - Department of Economics and Finance ( email )

MTSU Box 190
1301 E. Main St.
Murfreesboro, TN 37132-0001
United States

HOME PAGE: http://www.danieljosephsmith.com/

Middle Tennessee State University - Jennings A. Jones College of Business ( email )

TN
United States

Macy Scheck

Political Economy Research Institute at Middle Tennessee State University ( email )

MTSU Box 190
1301 E Main St
Murfreesboro, TN 37132
United States

HOME PAGE: http://www.macyscheck.com/

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