State certificate of need (CON) laws have remained in flux nationwide since New York implemented the first CON legislation in 1964. Already unpopular, the anti-competitive laws had an infamously negative impact on COVID response, leading to renewed public concern.
Intentionally restricting the number of healthcare providers by force of law has always resulted in fewer options, higher prices, and longer wait times. But a pandemic made the problem far more visible. Multiple states have since made sweeping changes to their CON laws, with Georgia and Tennessee most recently announcing adjustments.
Each time a state succeeds in making CON changes, policy crafters in other states would be wise to see what it did to improve or worsen the situation so they can copy or avoid the same moves. Here is a condensed list of the good, the bad, and the questionable from Georgia and Tennessee.
The Good
After immense pressure from nearly all sides, the Georgia legislature finally allowed birthing centers to open without approval from local hospitals. Yes, hospital administrators had been able to legally prevent birthing centers from operating and competing with their hospitals. Mercifully, this is no longer the case.
Tennessee lifted its restrictions on new machinery and associated procedures such as magnetic resonance imaging (MRI) and positron emission tomography (PET) scans. Medical facilities will finally be able to let patient demand guide the number of machines and procedures.
The Bad
Although Georgia legislators removed the cap on spending toward spaces such as hospital operating and procedure rooms, they left inpatient beds out of this exemption. It seems odd that patients can now feel more confident their hospital will have an operating room for them, but their accommodations after surgery are less secure. And surely COVID taught administrators that a lack of inpatient beds can quickly lead to an emergency.
Along with enforcing CON laws, Tennessee can still offer hospitals a certificate of public advantage (COPA), which enables them to merge and form an outright monopoly with added legal protections. It allows the newly formed medical provider to operate essentially free from CON restrictions. Multiple hospitals did this to form Ballad Health in Appalachian Tennessee, which has proven devastating for the area. For example, emergency room wait times almost tripled in the years following the agreement. Although they rolled back many restrictions, legislators ultimately left CON in place for all providers other than Ballad, which makes the new CON reversals virtually useless in the affected areas.
The Questionable
A new rural hospital can now open in Georgia without permission from a CON board… if another hospital in the area closed more than one year before. Of course, CON opponents want the mandate for permission abolished, but allowing a new hospital where one has closed is progress. However, the requirement that a new hospital wait a year—as local patients languish with no nearby hospital—is absurd. If a hospital closed due to a lack of patients, it may well have just been an unpopular hospital, and a new one should be able to try immediately.
Tennessee loosened hospital restrictions as well.
Existing hospitals can also now open satellite emergency rooms without needing a CON if the new room is within 10 miles of their main campus and not within 10 miles of a competing hospital. Removing a CON requirement for an emergency room is an obvious improvement, but particularly in a crowded or expensive area, limiting the location is yet another restriction patients don’t need their hospitals to face.
Tennessee also exempted many facilities, such as burn units, long-term care hospitals, and heart surgery units from CON. However, many of these exemptions do not take effect until December 1, 2025, and the heart surgery exemption does not begin until December 1, 2029. People in need of heart surgery are not going to be pleased if they do not get more options for five years.
Ultimately, Georgia and Tennessee offered patients a mixed bag with their new legislation, but the overall trend was away from unnecessary restrictions. That means it was toward better healthcare access, and it’s always nice to celebrate that victory.