Does Removing Certificate-of-Need Regulations Lead to a Surge in Health Care Spending?

Conover, Christopher J.; Sloan, Frank A.

doi:10.1215/03616878-23-3-455

Cited by 94 publications

(88 citation statements)

References 27 publications

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“…The strong consensus of this literature is that hospital CON is associated with similar or higher inpatient costs (Conover and Sloan 1998;Antel et al 1995;Ohlhausen 2015). Less attention has been directed toward the impact of hospital CON on hospital quality, with some studies suggesting improved quality for complex inpatient procedures (Vaughan-Sarrazin et al 2002), but lower quality for more routine hospital care (Stratmann and Wille 2016).…”

Section: Discussionmentioning

confidence: 99%

State entry regulation and home health agency quality ratings

Ohsfeldt

2018

J Regul Econ

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There is a substantial literature assessing the impact of entry restrictions created by state certificate-of-need (CON) programs on hospital and nursing home markets, but comparatively little research has focused on CON for home health agencies (HHAs). We assessed the impact of state CON programs for HHAs, and for potential substitute service providers, on quality ratings for HHAs. HHA quality ratings were obtained from the Home Health Compare database developed by the Centers for Medicare and Medicaid Services (CMS) for the last quarter of 2010 through the last quarter of 2013. The HHA-level data were augmented with county-level area characteristics for each HHA in the CMS database. An ordered logit model was used to estimate the association between state CON restrictions and Low, Medium, and High quality categories, adjusted for HHA and area characteristics. The results indicated that HHAs in states with CON for HHAs were less likely to have High quality ratings, and more likely to have Medium quality ratings, compared to agencies in states without CON for home health. Additional research is needed to assess whether the apparent adverse impact of CON on HHA quality is related to diminished competition among HHAs in states with CON.

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Section: Discussionmentioning

confidence: 99%

State entry regulation and home health agency quality ratings

Ohsfeldt

2018

J Regul Econ

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“…It is widely known that certificate of need (CON) programs have been ineffective in controlling hospital costs (Lanning, Morrisey, and Ohsfeldt 1991;Conover and Sloan 1998). However, many have argued that such programs have limited the growth of the nursing home industry, and thereby limited state Medicaid expenditures.…”

Section: The Effects Of Con Repeal On Medicaid Nursing Home and Long-mentioning

confidence: 99%

“…Over the years there have been several attempts to examine the effects of nursing home CON (Feder and Scanlon 1980;Birnbaum et al 1982;Lee, Birnbaum, and Bishop 1983;Harrington and Swan 1987;Harrington et al 1997;Conover and Sloan, 1997;Miller et al 2001). Most have focused on either the effects of CON on bed capacity or the effects of bed capacity on Medicaid expenditures.…”

Section: Introductionmentioning

confidence: 99%

The Effects of CON Repeal on Medicaid Nursing Home and Long-Term Care Expenditures

Grabowski

Ohsfeldt²,

Morrisey³

2003

INQUIRY

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Certificate-of-need (CON) and construction moratorium laws are used widely by states as a potential mechanism for constraining Medicaid nursing home expenditures. However, there is only limited empirical work examining whether these policies are effective at lowering Medicaid spending. Using aggregate state-level data from 1981 through 1998, this study found that states that repealed their CON and moratorium laws had no significant growth in either nursing home or long-term care Medicaid expenditures. In the context of declining occupancy rates within the nursing home market, this study provides strong evidence that states have little to fear in terms of increased expenditures with the repeal of CON and moratorium laws.

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“…The definitions and sources of the variables associated with each covariate vector are described in Table 1 h State data based on data from Conover and Sloan (1998;. ( share of Medicare and Medicaid inpatient days (MCARE; MCAID).…”

Section: Methodsmentioning

confidence: 99%

“…Studies of the impact of CON programs consistently have found the programs to be ineffective at controlling costs and enhancing access, and in some cases have been shown to increase costs (Sloan 1988;Lanning, Morrisey, and Ohsfeldt 1991;Antel, Ohsfeldt, and Becker 1995;Conover and Sloan 1998). The U.S. experience with airline regulation is the opposite.…”

mentioning

confidence: 99%

Effects of Specialty Hospitals on the Financial Performance of General Hospitals, 1997–2004

Schneider¹,

Ohsfeldt²,

Morrisey³

et al. 2007

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Hospital specialization has become a controversial topic, culminating in a moratorium issued in 2003 by Congress directing the Centers for Medicare and Medicaid Services to cease payments to new physician-owned specialty hospitals for those Medicare and Medicaid patients referred by physicians with a financial interest in the facility. This paper focuses on one important economic question: does the presence of specialty hospitals in a market affect general hospitals' financial performance? We estimate longitudinal fixed-effects models for a national panel of short-term acute care hospitals for the period 1997 though 2004; models are estimated for general hospital patient-care revenue, costs, and operating margins. We find that the presence of one or more new or established specialty hospitals in a market has a negative effect on general hospital costs and a positive effect on general hospital operating margins. Results, which were consistent across several different modeling approaches, imply that the presence of specialty hospitals encourages greater efficiency on the part of incumbent general hospitals, and the existence of profits attracts market entry. Our findings question the contention that competition from specialty hospitals harms general hospitals financially.

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Does Removing Certificate-of-Need Regulations Lead to a Surge in Health Care Spending?

Cited by 94 publications

References 27 publications

State entry regulation and home health agency quality ratings

State entry regulation and home health agency quality ratings

The Effects of CON Repeal on Medicaid Nursing Home and Long-Term Care Expenditures

Effects of Specialty Hospitals on the Financial Performance of General Hospitals, 1997–2004

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