Question

Explain how Certificates of Need (CON) may be anticompetitive.

Answer 1

A Certificate of Need (CON) is an endorsement that numerous states require before approving the construction of a new health-care facility. The central idea of CON legislation is the assertion that overbuilding and redundancy in health-care facilities leads to higher health-care costs

CON laws require certain providers such as hospitals, mainly to secure a permit from the state before making specified capital expenditures.

The Certificates of Need (CON) may be anticompetitive due to the following reasons:

1. CON programs vary state to state, with inconsistent metrics and management.

2.Con programs allow for political influence in deciding whether facilities will be built, which can invite manipulation and abuse.

3. Identifying the “best interests” of a community isn’t always clear; decisions ostensibly made for the greater good could have unintended consequences in the long-term, particularly in an unsteady economy or, for example, in a rapidly gentrifying neighborhood.