Certificate of Need
Encyclopedia
A Certificate of Need in the United States
, is a legal document required in many state and some federal jurisdictions before proposed acquisitions, expansions, or creations of facilities are allowed. CONs are issued by a federal or state regulatory agency with authority over an area to affirm that the plan is required to fulfill the needs of a community. The concept of the Certificate of Need first arose in the field of health care
and was passed first in New York in 1964 and then into federal law by the Richard Nixon
administration in 1972. Certificates of need are necessary for the construction of medical facilities in 35 states and are issued by state health care agencies:
A number of factors spurred states to require certificates of need in the health care industry. Chief among these was the concern that the construction of excess hospital capacity would cause competitors in an oversaturated field to cover the costs of a diluted patient pool by over-charging, or by convincing patients to accept hospitalization unnecessarily.
In some instances where state and federal authorities overlap, federal regulations may defer authority from the federal agency to the state agency with concurrent authority as to the issuance of a certificate of need. However, deferment of this authority is not required. For example, the Department of Housing and Urban Development has issued the following determination:
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, is a legal document required in many state and some federal jurisdictions before proposed acquisitions, expansions, or creations of facilities are allowed. CONs are issued by a federal or state regulatory agency with authority over an area to affirm that the plan is required to fulfill the needs of a community. The concept of the Certificate of Need first arose in the field of health care
Health care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
and was passed first in New York in 1964 and then into federal law by the Richard Nixon
Richard Nixon
Richard Milhous Nixon was the 37th President of the United States, serving from 1969 to 1974. The only president to resign the office, Nixon had previously served as a US representative and senator from California and as the 36th Vice President of the United States from 1953 to 1961 under...
administration in 1972. Certificates of need are necessary for the construction of medical facilities in 35 states and are issued by state health care agencies:
A number of factors spurred states to require certificates of need in the health care industry. Chief among these was the concern that the construction of excess hospital capacity would cause competitors in an oversaturated field to cover the costs of a diluted patient pool by over-charging, or by convincing patients to accept hospitalization unnecessarily.
In some instances where state and federal authorities overlap, federal regulations may defer authority from the federal agency to the state agency with concurrent authority as to the issuance of a certificate of need. However, deferment of this authority is not required. For example, the Department of Housing and Urban Development has issued the following determination:
Criticism
Since new hospitals cannot be constructed without proving a "need," the certificate-of-need system grants monopoly privileges to already existing hospitals. Consequently, Alaska House of Representatives member Bob Lynn has argued that the true motivation behind certificate-of-need legislation is that "large hospitals are... trying to make money by eliminating competition" under the pretext of using monopoly profits to provide better patient care.Further reading
- Robert James Cimasi, The U.S. Healthcare Certificate of Need Sourcebook (2005). "A state-by-state analysis of the certificate of need statutes, regulations, case law, and key state health department personnel".