You are a health systems analyst with MegaHealth.

  After seeing a news report on the aging

of American, the board chair has expressed an interest in opening long-term care facilities in
Oregon, Wisconsin, and Minnesota.  The vice president for planning has asked you for
background information on Certificate of Need (CON) requirements in these states.   Prepare a
brief passage that defines a CON and explores the pros and cons of the law.  Then, create a
table that compares the legal requirements for CONs in those three states.  Finally, summarize
your findings.  Which state law is the least onerous?  Why?  Which one is the most difficult of
the three?  Why?  Are they controversial?  If so, in what way?
Certificate of Need (CON) operates under the assumption that healthcare facilities raise prices
for procedures and services to compensate for the loss of revenue from vacant beds. “ CON
programs require a health care facility to seek a health planning agency’s approval based on a set
of criteria and community need” (NCSL, 2019). CON proponents argue that healthcare is not a
shop-able product for consumers having patients rely on healthcare providers orders and
opinions, these programs limit health care spending, and can help distribute care to underserved
areas (NCSL, 2019). CON opponents argue that the law reduced price competition, vary by state
and therefore develop program inconsistencies, and allows for health care to be used as a
political tool inviting possible manipulation and abuse (NCSL, 2019). Below is table adapted
from NCSL (2019) listing CON requirements in Oregon, Minnesota, and Wisconsin.

State and Program Program Details Moratoria

Licensing
Agency
Oregon: CON Facilities Regulated: None
Oregon  Hospitals
Health  Skilled Nursing Facilities
Authority /  Intermediate Care Facilities
Public Capital Expenditures Regulated:
Health  Developing a new hospital
Division  Developing a new long-term
care facility or service
Wisconsin: CON Wisconsin does not have an official Yes-Hospital beds,
Wisconsin Variation certificate of need program. The state, psychiatric/chemical
Department however, maintains certain approval dependency beds and
of Health processes for long-term care; nursing home beds
Services moratoriums for hospital,
psychiatric/chemical dependency, and
nursing home beds; and a certificate of
public advantage program pursuant to
Wis.Stat. § 150
Minnesota: CON While Minnesota does not have a Yes- Hospitals and hospital
Variation certificate of need program, it maintains beds, nursing home
various approval processes that function beds, intermediate care
similarly to CON. The 2004 state facilities for persons with
 legislature established a public interest developmental disabilities
review process for hospitals seeking and radiation therapy
exceptions to that state’s hospital bed facilities in certain
moratorium law. Additionally, the state locations. 
created a local system needs plans for
intermediate care facilities pursuant to
Minn. Stat § 252.282. This program
allows counties to evaluate and regulate
its service system to best support the
needs of persons with developmental
disabilities.

From the above information it would seem that Oregon has the most difficult CON laws
whereas Minnesota has the least onerous CON type laws. CON laws are associated with
higher healthcare spending per capita and higher physician spending per capita (CON Laws,
2016). States with CON laws also have fewer rural healthcare centers and fewer ambulatory
surgical centers compared to states without specific CON laws. CON laws also point to lower
quality healthcare. The more CON laws in place, the lower health quality indicators (CON
Laws, 2016).

Certificate-of-Need Laws (CON Laws). (2016, September 27). Mercatus Center, George
Mason University. Retrieved from
https://www.mercatus.org/system/files/oregon_state_profile.pdf
National Conference of State Legislatures (NCSL). (2019, December 01). CON-Certificate of
Need State Law https://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx

Great post! I found it interesting that you thought Oregon is the least burdensome because the
only requirement is to go through the government and prove need. I would think that this can
cause its own level of burden as navigating government paperwork and “red tape” so to speak
can be a mess on its own. I think that the idea of CON law is needed in many communities.
There should be a balance between the revenue generating by the healthcare industry and the
patients they serve.

Wouldn’t “reducing competitive pricing” be a con under CON law? I would think that
competitive pricing would help drive costs down for the patients and force healthcare
organizations to manage their own financials better (ie not creating more beds when there is not
need). I agree with your viewpoint on Oregon being less onerous due to the fact that the CON
law is consistent throughout the state. This alone would lessen the difficulty around wanting to
open more healthcare facilitates, I would imagine.