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Monopoly is not the answer.

Clark C Havighurst1

  • 1Duke University School of Law, Durham, North Carolina, USA. havighurst@law.duke.edu

Health Affairs (Project Hope)
|August 11, 2005
PubMed
Summary

Certificate-of-Need (CON) regulation is an outdated protectionist policy that harms consumers. It unfairly burdens working Americans by financing healthcare projects through regressive cross-subsidies.

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Area of Science:

  • Health Economics
  • Public Policy
  • Healthcare Regulation

Background:

  • Certificate-of-Need (CON) regulations were designed to address past healthcare market failures.
  • Current CON regulations are being invoked in situations where market competition is perceived as excessive.

Purpose of the Study:

  • To critically evaluate the continued relevance and impact of Certificate-of-Need (CON) regulations in modern healthcare markets.
  • To analyze the economic and social implications of using CON regulations to manage healthcare competition and financing.

Main Methods:

  • The study employs economic analysis to critique the theoretical underpinnings and practical consequences of CON regulations.
  • It examines the historical context of CON and contrasts it with current healthcare market dynamics.

Main Results:

  • CON regulations are identified as protectionist policies that are no longer justified by market conditions.
  • These regulations can stifle competition and lead to increased healthcare costs for consumers.
  • The use of cross-subsidies under CON laws places an unfair financial burden on working Americans.

Conclusions:

  • Certificate-of-Need (CON) regulations are an anachronistic and misguided policy in contemporary healthcare.
  • Repealing CON regulations is recommended to promote fair competition and reduce financial burdens on consumers.
  • CON laws exacerbate market inefficiencies and create regressive financial impacts.

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