Certificate of Need Laws and Health Care Prices

Abstract

Certificate of Need laws, currently in force in 35 US states, require proposed health care facilities to gain the permission of a state board before opening or expanding.

We aim to determine how Certificate of Need laws affect health care prices. We analyze state-level data on health care prices from the Health Care Cost Institute from 2012-2013 to compare prices in states with and without Certificate of Need laws using linear regression. We find that states with Certificate of Need laws have higher prices than states without Certificate of Need laws, but this difference is not statistically significant. New data on US health care prices will increasingly allow researchers to evaluate how policy affects these prices, though we cannot yet precisely estimate the effect of Certificate of Need laws on prices.