The Impact of Certificate of Need Laws on Heart Attack Mortality: Evidence from County Borders

38 Pages Posted: 10 Oct 2020 Last revised: 29 Dec 2021

See all articles by Kevin Chiu

Kevin Chiu

Precision Health Economics

Date Written: April 4, 2021

Abstract

Certificate of need (CON) regulations requires that health care providers obtain state
approval before offering a new service or expanding existing facilities. The purported goal
of CON regulations is to reduce health care costs by generating regional economies of scale
and reducing redundant investments resulting from excessive competition. Critics of CON
regulations note that the regulatory environment increases the costs of expansion and may
incentivize health care providers to forgo capital investment, which can have a negative
effect on health outcomes. To estimate the net effect of CON regulations, I use a border
discontinuity design to measure within-regional heart attack mortality spanning 1968 to 1982.
I estimate that CON regulations led to an increase in heart attack deaths, by 6%-10%, three
years after the policy was enacted.

Keywords: Certificate of Need, CON, Acute Myocardial Infarction, Mortality, Heart Attack, Health Policy, Border Discontinuity

JEL Classification: I11, I18, H75, R58

Suggested Citation

Chiu, Kevin, The Impact of Certificate of Need Laws on Heart Attack Mortality: Evidence from County Borders (April 4, 2021). Journal of Health Economics, Vol. 79, No. 102518, 2021, Available at SSRN: https://ssrn.com/abstract=3678714 or http://dx.doi.org/10.2139/ssrn.3678714

Kevin Chiu (Contact Author)

Precision Health Economics ( email )

11100 Santa Monica Blvd, Ste 500
Los Angeles, CA 90025

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