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Certificate-of-need deregulation and indigent hospital care
1East Carolina University.
Journal of Health Politics, Policy and Law
|January 1, 1993
Summary
Certificate-of-need (CON) regulations, intended to limit hospital competition, have failed to prevent excess capacity. Instead, CON policies appear to subsidize care for the indigent by restricting lucrative services.
Area of Science:
- Health Policy
- Health Economics
- Hospital Administration
Background:
- Certificate-of-Need (CON) regulations have historically aimed to control hospital services and prevent overcapacity.
- The explicit goals of CON regulations have not been met, leading to an examination of implicit objectives.
Purpose of the Study:
- To investigate the implicit aim of Certificate-of-Need (CON) regulations in facilitating cross-subsidization for indigent care.
- To analyze the role of CON licenses in promoting internal subsidization of healthcare services for the poor.
Main Methods:
- Probit analysis was employed to examine the relationship between CON licenses and indigent care financing.
- Data from Florida hospitals between 1983 and 1989 were utilized for the analysis.
Main Results:
- Evidence suggests that CON licenses have been instrumental in fostering the internal subsidization of indigent care.
- The restriction of competition in lucrative services, facilitated by CON, incentivizes hospitals to provide care to the indigent population.
Conclusions:
- CON policies may serve as a mechanism for legislators to fund indigent care without direct tax increases.
- The reliance on CON for indigent care financing presents significant challenges, particularly with increasing deregulation of CON laws.