Surgical center hovering above rural area.

Is Repealing Certificate-of-Need Laws the Cure for Healthcare Access? The Surprising Impact on Ambulatory Surgical Centers

Theo Raines monogram
Theo Raines in Health & Wellness October 2026 • 4 min read.

"Uncover the truth behind certificate-of-need laws and their impact on medical service accessibility in ambulatory surgical centers. Does deregulation really lead to better healthcare outcomes?"


In many states, healthcare accessibility is governed by certificate-of-need (CON) laws, which regulate the entry and expansion of ambulatory surgical centers (ASCs). These laws require healthcare facilities to obtain regulatory approval before offering new services or making significant capital investments, effectively creating barriers to entry. The debate surrounding CON laws centers on whether they improve access to medical care, lower costs, and enhance service quality, or if they stifle competition and limit patient choice.

A recent study delves into the causal effects of repealing ASC-CON laws, analyzing data from multiple states to determine the impact on the accessibility of medical services. This research aims to provide clarity on the role of deregulation in healthcare, particularly its effect on rural communities where access to specialized medical services is often limited.

By examining the changes in ASC availability following CON law repeals, the study sheds light on whether these laws serve as genuine protections for healthcare quality and access, or whether they represent unnecessary obstacles to market entry and competition. Understanding these dynamics is crucial for policymakers and healthcare administrators seeking to optimize healthcare delivery and improve patient outcomes.

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Defining Certificates and Their Documentation Role

A certificate is an official document that recognizes a person's achievement, completion, or qualification in a specific area. Certificates are often used in education, training, or professional recognition to provide formal validation and authenticity. While the term 'certificate' appears across many domains, its use in healthcare regulation — particularly as a Certificate of Need — carries significant policy implications for facility access and market entry.

Templates as a Proxy for Standardized Processes

Standardized templates — whether for awards, qualifications, or regulatory compliance — offer a structured framework that can streamline documentation across industries. In healthcare, Certificate of Need processes similarly attempt to standardize the evaluation of whether new facilities are warranted. However, rigid template-based or formulaic approaches may fail to capture the nuanced, region-specific dynamics that drive actual patient access and demand.

Origins of Certificate-of-Need Regulation

Certificate-of-Need laws emerged in the 1960s and 1970s as a policy tool to control rising healthcare costs by requiring state approval before new facilities or major equipment could be added. Their adoption accelerated following the National Health Planning and Resources Development Act of 1974, which incentivized states to implement such programs. Over the following decades, the regulatory landscape shifted considerably as many states reconsidered whether these laws achieved their intended cost-containment goals.

Certificate-of-Need Laws: What Are They and Why Do They Matter?

Surgical center hovering above rural area.

Certificate-of-Need (CON) laws are state regulations that require healthcare facilities, such as hospitals and ambulatory surgical centers, to obtain approval from a state regulatory body before undertaking certain projects. These projects typically include building new facilities, expanding existing services, or making significant capital investments. The intent behind CON laws is to control healthcare costs, prevent unnecessary duplication of services, and ensure that communities have adequate access to healthcare facilities.

The rationale for CON laws rests on the idea that without such regulations, healthcare providers might overinvest in certain services, leading to higher costs and underutilization of resources. CON laws aim to promote a more orderly and efficient healthcare market by carefully managing the supply of healthcare facilities and services.

Proponents of CON laws argue that they:
  • Ensure equitable distribution of healthcare resources across different geographic areas.
  • Protect the financial stability of existing healthcare providers by limiting competition.
  • Promote the provision of charity care and other essential services.
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Evolving Evidence on CON Law Effectiveness

Recent academic and policy research has increasingly scrutinized the relationship between Certificate-of-Need requirements and measurable healthcare outcomes. Studies have explored whether CON laws effectively control costs or instead inadvertently limit patient access by suppressing new facility development. The body of evidence remains mixed, with findings varying by state context, specialty area, and the specific regulatory mechanisms employed.

Unintended Consequences of CON Regulation

Critics of Certificate-of-Need laws argue that these regulations can create barriers to entry that reduce competition and limit patient choice, particularly in underserved areas. Some research suggests that CON states may have fewer ambulatory surgical centers per capita compared to non-CON states, potentially restricting access to lower-cost outpatient procedures. However, proponents counter that without such oversight, facility proliferation could lead to unsustainable healthcare spending and quality concerns.

CON vs. Non-CON State Outcomes

Comparative analyses between states that maintain Certificate-of-Need laws and those that have repealed them reveal differing patterns in healthcare facility density, procedural costs, and patient access metrics. States that repealed CON requirements have generally seen growth in ambulatory surgical centers, which may improve geographic access but also raise questions about utilization patterns and cost containment. The complexity of these comparisons underscores the difficulty of drawing universal policy conclusions from state-level variation.

However, critics contend that CON laws stifle competition, limit patient choice, and ultimately lead to higher healthcare costs and reduced access to care. By creating barriers to entry, CON laws can prevent new providers from entering the market, limiting innovation and potentially leading to monopolies or oligopolies in certain healthcare sectors.

Deregulation and Healthcare Access: A Path Forward

The debate over certificate-of-need laws highlights the complexities of healthcare regulation and the need for evidence-based policymaking. While CON laws were originally intended to control costs and ensure access to care, research suggests that they may have unintended consequences, such as limiting competition and reducing access to specialized medical services. As policymakers grapple with the challenges of healthcare reform, it's crucial to consider the potential effects of deregulation on both urban and rural communities, and to carefully weigh the costs and benefits of different regulatory approaches.

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Balancing Regulation and Access

Healthcare policy experts broadly acknowledge that Certificate-of-Need laws involve tradeoffs between cost control and market accessibility. While these regulations were designed to prevent unnecessary duplication of services, their practical effects on ambulatory surgical center proliferation remain a subject of ongoing debate. Any assessment of CON repeal must weigh potential gains in patient access against the risk of unchecked facility expansion and its fiscal implications.

Policy Direction and Emerging Considerations

As healthcare delivery continues to shift toward outpatient and ambulatory settings, the relevance of Certificate-of-Need frameworks will likely be reassessed by policymakers across states. Emerging trends such as telehealth expansion, shifting payer models, and evolving patient preferences may further reshape the debate over whether traditional CON mechanisms remain an appropriate regulatory tool. Future research will need to address how these broader systemic changes interact with state-level regulatory decisions.

Healthcare Regulation Within a Shifting Landscape

Certificate-of-Need laws exist within a broader ecosystem of healthcare regulation that includes licensure, accreditation, and payment policy. Systemic challenges — such as workforce shortages, geographic disparities in care access, and rising healthcare costs — complicate the evaluation of any single regulatory mechanism. A holistic understanding of healthcare access requires examining how CON policies interact with these wider structural forces.

How CON Laws Affect Patient Access

Ultimately, the debate over Certificate-of-Need laws centers on their real-world impact on patients seeking timely access to surgical care. In communities where CON requirements delay or prevent the opening of ambulatory surgical centers, patients may face longer travel times and fewer options for outpatient procedures. Conversely, in markets without such safeguards, the proliferation of facilities does not always guarantee equitable access for underserved populations.

What the reported figures say about CON and access

  • 30%; 13%A cited comparison reports 30% fewer rural hospitals and 13% fewer rural ambulatory surgery centers in the relevant comparison; the excerpt does not identify its baseline.[1]
  • 17.5%; 19.6% counties with ambulatory surgery centersAmong counties with rural hospital closures, 17.5% had ambulatory surgery centers, compared with 19.6% of counties without closures.[2]
  • 3.7; 2.5For CABG in 2002, the reported per-capita count of hospitals performing the procedure was 3.7 per 100,000 elderly in states without CON and 2.5 in CON states.[3]
  • 2% reduction in bed supplyMature CON programs were also associated with a 2% reduction in bed supply, alongside higher costs per day and per admission and higher hospital profits.[4]

Reading the evidence on facilities and spending

The comparisons point in different directions: some associate CON with savings or lower acute-care spending, while others report fewer facilities in particular settings under CON. These measures describe different outcomes, so they do not by themselves establish that changing the rules would improve access without affecting spending.[1] [4]

The cited analysis describes a method that accounts for area characteristics, other regulation, and competition while examining costs, supply, technology diffusion, and industry organization. Its reported finding that CON regulations had no detectable effect on diffusion of various hospital-based technologies is not evidence that every technology or outcome is unaffected.[4]

How other evidence frames CON tradeoffs

A federal antitrust statement says empirical evidence on whether CON laws achieve their many objectives is limited, including evidence on the broader effects of repeal. That cautions against treating the facility and spending comparisons as a complete account of repeal outcomes.[5]

The cited cost discussion notes that federal payment rates are higher for procedures in hospital outpatient departments than for the same services at ambulatory surgery centers. It describes site-neutral payment reform as a possible way to amplify savings, making payment rules a relevant part of the comparison rather than a result of CON repeal alone.[1]

A Washington State policy document presents reform, partial or full repeal paired with monitoring, and another study as options. Its framing leaves open whether repeal effects can be identified clearly enough to distinguish among those approaches.[6]

  • How much of any cost change would reflect CON rules themselves, rather than payment differences between hospital outpatient departments and ASCs?[1] [4]

Sources

  1. Certificate of Need Laws in Health Care: Past, Present, and Future (pmc.ncbi.nlm.nih.gov)
  2. GAO-21-93, Accessible Version, RURAL HOSPITAL CLOSURES: Affected Residents Had Reduced Access to Health Care Services (www.gao.gov)
  3. Certificate of need laws: a systematic review and cost-effectiveness analysis (pmc.ncbi.nlm.nih.gov)
  4. Does removing certificate-of-need regulations lead to a surge in health care spending? (pubmed.ncbi.nlm.nih.gov)
  5. Joint Statement of the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice on Certificate-of-Need Laws and South Carolina House Bill 3250 (www.ftc.gov)
  6. Need.PDF (leg.wa.gov)

About this Article -

Written with AI assistance from published research, and reviewed by the Mystum team. See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2405.0816,

Title: The Causal Effect Of Repealing Certificate-Of-Need Laws For Ambulatory Surgical Centers: Does Access To Medical Services Increase?

Subject: econ.gn q-fin.ec

Authors: Thomas Stratmann, Markus Bjoerkheim, Christopher Koopman

Published: 13-05-2024

Everything You Need To Know

1

What are Certificate-of-Need (CON) laws and what is their primary purpose in the healthcare sector?

Certificate-of-Need (CON) laws are state regulations that mandate healthcare facilities, including hospitals and ambulatory surgical centers, to obtain approval from a state regulatory body before commencing certain projects. These projects include constructing new facilities, expanding existing services, or making substantial capital investments. The fundamental aim of CON laws is to manage healthcare costs, prevent unnecessary duplication of services, and ensure equitable healthcare access within communities. The rationale is to promote a more organized and efficient healthcare market by carefully managing the supply of healthcare facilities and services. CON laws are intended to act as a gatekeeper, preventing providers from overinvesting and ensuring resources are allocated effectively.

2

How do Certificate-of-Need (CON) laws affect the operations of Ambulatory Surgical Centers (ASCs)?

CON laws significantly impact Ambulatory Surgical Centers (ASCs) by regulating their entry and expansion. ASCs must seek regulatory approval before offering new services or making substantial capital investments, which can create barriers to market entry. This regulatory hurdle can restrict the number of ASCs, the services they offer, and their geographic distribution. The process can be time-consuming and costly, potentially limiting the availability of specialized medical services, especially in areas where access is already limited. The effect on ASCs directly influences patient access, service variety, and overall healthcare competition.

3

What arguments are used in favor of Certificate-of-Need (CON) laws, and what are the criticisms against them?

Proponents of Certificate-of-Need (CON) laws argue that they ensure an equitable distribution of healthcare resources across different geographic areas, protect the financial stability of existing healthcare providers by limiting competition, and promote the provision of charity care and other essential services. Critics, however, argue that CON laws stifle competition, limit patient choice, and contribute to higher healthcare costs and reduced access to care. By creating barriers to entry, CON laws can prevent new providers like ASCs from entering the market, potentially leading to monopolies or oligopolies in certain healthcare sectors, and limiting innovation within the industry.

4

What are the potential consequences of repealing Certificate-of-Need (CON) laws on healthcare access, specifically in rural communities, and on the operation of Ambulatory Surgical Centers (ASCs)?

Repealing Certificate-of-Need (CON) laws can have varied impacts. Deregulation could lead to increased competition, potentially driving down costs and enhancing patient choice. It might also encourage the expansion of Ambulatory Surgical Centers (ASCs) and the introduction of new services. In rural communities, where access to specialized medical care is often limited, repealing CON laws could improve access to services. However, it may also lead to the over-saturation of certain services or the closure of facilities if the market becomes unsustainable. Policymakers must carefully consider the potential effects of deregulation on both urban and rural communities.

5

How does the debate over Certificate-of-Need (CON) laws relate to the broader challenges of healthcare reform and evidence-based policymaking?

The debate over Certificate-of-Need (CON) laws exemplifies the complexities of healthcare regulation and underscores the importance of evidence-based policymaking. While CON laws were designed to control costs and ensure access to care, research indicates they may have unintended consequences, such as limiting competition and potentially reducing access to specialized medical services. As healthcare systems evolve, policymakers must evaluate these regulations through rigorous analysis. This includes assessing the impacts of deregulation on both urban and rural populations. The goal is to find the optimal balance between regulating healthcare costs and promoting patient access, choice, and quality of care. Decisions should be informed by data and designed to optimize healthcare delivery and improve patient outcomes, rather than being based on assumption.

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