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The battle over Certificate of Need (CON) laws is intensifying as states take sharply different approaches to healthcare regulation. In West Virginia, an effort to repeal the state’s CON Laws was narrowly defeated in the House Health Committee by a 13-12 vote, dealing a setback to deregulation advocates. However, a separate bill seeking to eliminate CON laws is still under consideration in the Senate, keeping the debate ongoing. Meanwhile, in Mississippi, lawmakers are moving in the opposite direction, with the state House overwhelmingly passing HB 922 by a 107-5 vote. The bill, currently awaiting review in the Mississippi Senate, aims to eliminate CON requirements for several healthcare services, including birthing centers and psychiatric care facilities, and introduce a faster appeal process for denied applications.
As the debate over these controversial regulations gains momentum nationwide, it’s worth clarifying a key point: CON laws don’t protect healthcare access—they restrict competition, drive up costs, and leave patients with fewer options. Repealing them is the right choice for every state.
CON laws require healthcare providers to obtain approval from a state regulatory board before expanding services or opening new facilities. In states like West Virginia, these regulations can be particularly burdensome. For example, providers must seek permission before making any changes to equipment, services, facilities, or even the number of hospital and non-hospital beds. The state’s extensive CON program imposes significant costs, with application fees reaching as high as $35,000. But the financial burden often doesn’t end there—healthcare providers typically spend even more on consulting fees and other compliance costs.
The application process itself can take anywhere from 60 to 105 days, depending on whether a hearing is scheduled. Moreover, incumbent providers are allowed to challenge the applications of new entrants, creating further barriers for those looking to expand services or build new facilities.
When New York passed the first CON law in 1964, the theory was simple: limiting the supply of healthcare would prevent unnecessary spending and keep costs in check. Yet, as the years have gone by, mounting evidence suggests that CON laws often do the opposite. Instead of controlling costs and expanding access, they restrict competition and create inefficiencies within the healthcare system.
This reasoning remains the crux of arguments from supporters, who claim, “The CON law ensures these facilities remain viable by preventing unnecessary duplication of services that would drain limited resources from the local community.” Yet decades of experience and mounting evidence tell a different story: CON laws fail to deliver on their promises and often produce the exact opposite results.
Take West Virginia, where renewed debate over CON laws has shed light on their unintended consequences. According to a 2016 analysis by economists Thomas Stratmann and Christopher Koopman, eliminating CON laws in West Virginia would result in 42% more hospitals across the state and 43% more hospitals in rural areas. Instead of expanding access, these regulations have forced rural residents to drive long distances—or even cross state lines—for routine care.
Mississippi is another state that serves as a case study for the poor health outcomes of CON laws. Under Mississippi’s Certificate of Need (CON) laws, healthcare providers must obtain government approval before expanding services, opening new facilities, or purchasing medical equipment like MRI and PET scanners. Hospitals in Mississippi must even seek permission to add new beds, and new providers need approval to open hospitals or ambulatory surgery centers (ASCs).
According to a Mercatus report, these regulations’ consequences are clear. In 2017, Mississippi had just 116 hospitals, while a comparable state without CON laws had 165—more than 30% higher. The same report indicates that, in 2020, Mississippi had 67 ASCs, but the number would likely have exceeded 78 if CON laws were not in place, reflecting the trend in similar states. Furthermore, rural areas in Mississippi suffer disproportionately: by 2020, states without CON laws had 32 more rural hospitals than Mississippi’s 74, highlighting how these laws reduce healthcare access in regions that need it most.
The negative impact of CON laws isn’t limited to West Virginia or Mississippi. Nationally, the effects of these restrictions are striking. Studies show that in states with CON laws, hospital beds per capita are significantly lower than in states without them. On average, CON laws reduce hospital beds by 99 beds per 100,000 people, while the availability of advanced medical technologies, such as MRI and CT scanners, is also diminished.