Policy Documents

Certificates Of Need: A Bad Idea Whose Time Has Passed

Peter Doherty –
November 1, 2001

In a policy analysis from the James Madison Institute, Peter Doherty notes certificate of need laws arose largely in response to federal incentives adopted in 1974 and have stifled competition, raised existing providers’ profits, and given “little or no benefit to consumers.” Doherty writes, “Despite all the good intentions and despite the federal government strengthening the role of state authorities in the late 1970s, it was clear by the early 1980s that the design was not working. Not only were costs failing to come down as a result of CON reviews by health care planning bureaucrats, but they were increasing.” He concludes CON programs should be abolished.