Nursing homes and other long-term care facilities for the elderly have faced bed scarcity for decades, and the aging population promises to drive this situation to crisis. Multiple factors obviously contribute, but this problem continues in part due to the ubiquity of certificate of need (CON) laws in this specific industry. In the 35 states maintaining CON regulations, long-term care slots are some of the most tightly controlled

CON laws require a medical provider to obtain a government permission slip to open or alter a facility. But unlike most regulations, they have no relation to the safety, competency, or even efficiency of employees or equipment. A government board grants a certificate based on the supposed need the community has for the services to be provided.

Oddly, the community often does not have much say in the decision, and competing medical facilities do. Consequently, many hopeful practitioners are denied the legal ability to practice, even when the local population clearly expresses a desire, and the statistics clearly show a need. Few businesspeople welcome competition, and healthcare providers—including those for the elderly—are ultimately businesspeople. 

An Overlooked Epidemic

The news media has focused much attention on staffing shortages since the mass exodus of exhausted employees during the COVID-19 pandemic. More than 400,000 eldercare employees quit during the pandemic, so the headlines have understandably focused on this crisis. But although it is real, this acute—and typically cyclical—issue has masked the ongoing problem of space in the homes. As the number of elderly individuals jumps upward, capacity growth remains slow.

Over the past century in the United States, the population of people over age 65 increased five times faster than that of the general population, reaching 55.8 million in 2020. Notably, the largest decade jump—adding an additional 15.5 people—occurred between 2010 and 2020. By contrast, a cross-sectional study found the number of nursing home beds in 86.4% of U.S. counties declined from 2011 to 2019. 

The industry participants can coax staff back with increased pay and other incentives, but they cannot skirt the laws that prevent them from adding more rooms. Workers can legally come back tomorrow if the conditions meet their approval, but facilities can be blocked indefinitely from opening or expanding.

An Ignored Solution 

As industry members seek creative ways to increase the number of workers, many studiously ignore the fast and simple solution to increasing the number of slots: repealing CON laws. Healthcare associations and other existing providers are notoriously resistant to this change, because they can use the laws to maintain a virtual monopoly on health care in their area. In 2019 alone, in just the state of Michigan, the CON commission predicted a need for 3,000 additional nursing home beds. Yet when new providers stepped in with dozens of CON applications for nursing homes, incumbent facilities claimed no need existed, and four-fifths of the applications were denied or withdrawn. 

Few reversals of law are as easy as this one, once state legislators get past the pleas of hospital association heads. During the COVID-19 pandemic, 24 states quickly (albeit temporarily) suspended their CON legislation, resulting in new medical facilities quickly sprouting up where needed. After the moratorium expired, a few states took another look at their laws and loosened them. (Unfortunately, South Carolina eliminated all CON laws except those applying to nursing homes.) All CON states should have immediately done the same.

The speed with which the laws were suspended, coupled with the positive outcome, shows legislators have no excuse for putting off what should have been done long ago. The large aging population eying a small number of beds would be wise to exert as much pressure as possible on them.