Are Certificate-of-Need Laws Barriers to Entry? How They Affect Access to MRI, CT, and PET Scans | Mercatus

KEY FINDINGS

CON Regulations Have a Negative Effect on Nonhospital Providers

  • The association of a CON regulation with nonhospital providers is substantial, ranging from −34 percent to −65 percent utilization for MRI, CT, and PET scans.
  • Nonhospital providers in CON states experience significant decreases in the utilization of imaging services compared to hospital providers.

CON Regulations Have No Effect on Hospitals, Thus Increasing Their Market Share

  • CON regulation has no measurable effect on hospitals’ utilization of imaging services. The volume of services provided in hospitals is not affected by CON regulation.
  • This may explain why hospital providers have a stronger market presence in CON states than in non-CON states.

Consumers Are Driven to Seek Imaging Services in Non-CON States

  • CON regulations are associated with 3.93 percent more MRI scans, 3.52 percent more CT scans, and 8.13 percent more PET scans occurring out of state.
  • CON regulations may have a negative effect on consumers because patients living in CON states have to travel out of state more often than patients living in non-CON states. This propensity for traveling out of state to obtain medical services might be attributable to any of several factors: higher costs, a smaller selection of services, or restricted access to care.

CONCLUSION

CON laws act as barriers to entry for nonhospital providers and favor hospitals over other providers. In consequence, consumers of MRI, CT, and PET scanning services are driven to seek these services either out of state or in hospitals. More research is needed to determine whether additional costs and barriers in the healthcare industry restrict specific market providers and affect where procedures occur.

Source: Are Certificate-of-Need Laws Barriers to Entry? How They Affect Access to MRI, CT, and PET Scans | Mercatus

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