Certificate of Need (CON) legislation clearly restricts competition and choice in health care, so its continued existence in 35 states might bewilder someone familiar with it. These laws require any healthcare provider to prove to a government committee that its business is necessary to the local community before it can open or expand there. Existing medical businesses tend to testify that this hopeful business—their potential competitor—is not needed, and the new business is frequently prevented from operating.

In a country famous for antitrust laws and entrepreneurial spirit, how have these laws survived for six decades? Much of the reason lies with those existing medical businesses. Their explanation of CON laws tends to paint them in a flattering light, and voters and legislators can easily develop the wrong impression. Here are several claims about CON given by the Michigan Health and Hospital Association (MHA), along with a more complete explanation of the real laws. Other associations have made similar statements, but this article will use only MHA, to allow for simpler citation and research for readers. 

Claim: CON “ensures quality” in health care.

Truth: CON laws do not deal with the quality, safety, or effectiveness of healthcare services. Those issues fall under licensing laws and safety regulations. As the name implies, the only issue CON laws address is the purported need for a proposed service. 

The National Conference of State Legislatures (NCSL) states, “Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities… CON programs primarily aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need.”

The outcome of the laws also illustrates that they do not even incidentally improve quality. A comprehensive 2018 study from George Mason University suggested that these laws almost always lowered quality, and at best had no significant impact on it. Over the past 20 years, the U.S. Department of Justice and Federal Trade Commission (FTC) repeatedly testified to the same. 

Claim: CON “ensures accessibility” for patients.

Truth: Naturally, refusing to allow new businesses to open does not increase accessibility. Restricting the number of facilities, beds, machinery, and services in a state does not make accessing them easier. 

Again, the statistics bear out these logical assumptions. States with CON laws have 30% fewer hospitals overall per capita. They also have 30% fewer rural hospitals per capita, contradicting the pretense that CON makes it possible for rural patients to more quickly reach hospitals. 

Claim: CON ensures “cost-effective” care.

Truth: Less (or non-existent) competition does not motivate existing businesses to keep their prices low. Monopolies can charge any price they wish for necessary services and products. Customers (patients) have no choice but to pay higher prices. And trying to combat high prices with government price controls simply drives businesses into entering other markets. 

Again, real-world facts bear out these economic theories. In the extensive George Mason University research, seven studies showed higher costs in CON states, two showed no statistically significant effects, and two showed a mix of higher and lower costs. None of the studies showed overall lower costs. 

Claim: CON makes laws “only about a small set of health services.”

Truth: The 35 CON states have a wide variety of services subject to the rules. Some do, in fact, have few. However, Michigan—the state making the claim cited in this article—controls 19 separate and distinct services and machines. These include psychiatric care, nursing home beds, air ambulance (rendering emergency transport less available), multiple diagnostic machine types, and neonatal intensive care. Michigan claims that its laws focus on “advanced medical services,” the proliferation of which will supposedly make costs skyrocket. But additions such as nursing home beds hardly seem “advanced” or outrageously expensive.

Michigan, although restrictive, does not even control nearly the highest number of medical services in the 35 CON states. For example, Hawaii has 28 specific rules regarding such services as catheterization, burn care, and ground transport. 


MHA and its corresponding associations in other areas have listed numerous other justifications to maintain their grip on the healthcare market. None have passed muster by either logical consistency or statistical evidence. These associations benefit immensely by halting any challengers before they can even open a new business. The real reasons for CON laws have been obvious for 60 years, and research has only strengthened the arguments against them. Citizens and legislators must stop enabling these groups to control the healthcare system.