Conning the Competition

Closely reviewing the nation’s 39 CON jurisdictions reveals an incoherent doctrine. There is no rhyme or reason to what services require a CON. This strongly suggests that CONs are driven less by the government’s perception of what will improve patient health and more by lobbying efforts of powerful insider groups within each state.

• Nevada only has one facility CON, which it applies to hospitals in rural areas. Alabama, Florida, Kentucky, Oregon and Washington, on the other hand, require CONs in urban areas. In those states, the laws contain explicit exceptions that allow some rural providers to operate without CONs.
• In New York, skilled nursing facilities must get a CON to add beds designated specifically for AIDS patients. Yet Missouri allows nursing homes dedicated to the care of AIDS patients to open without a CON.
• Many states require facilities to obtain a CON to offer cardiac or cardiovascular surgeries, but not other types of surgeries.
• Most states regulate hospice care and/or hospice facilities, but Connecticut, Florida, Iowa, Maine, and Washington maintain exceptions for hospices so that they are not covered by CONs.

CONs are not limited to facilities with large capital investments as originally imagined. CONs were first envisioned as a tool to prevent two hospitals from opening around the block from each other. Unfortunately, today CONs are required for hundreds of minute, inexpensive and often mundane activities. Requiring a CON for high-demand services like primary care offices or imaging equipment is unnecessary and harms patients by decreasing access to needed services. Additionally, requiring CONs for a patchwork of inexpensive or highly specific projects forces providers to spend valuable time and money seeking CONs for relatively inexpensive things, such as:

• Adding or removing a single hospital bed;
• Opening a home health agency;
• Converting an existing hospital bed to a different use (e.g., psychiatric bed to intensive care unit bed);
• Adding ventilator services to a facility; or
• Performing a small or necessary renovation.

Moratoria are more dangerous than CONs. Eleven states maintain moratoria, which typically prohibit specific facilities from opening or adding beds. If CONs make increasing healthcare facilities and services more difficult, moratoria make it impossible and they should be repealed or allowed to expire.

CONs that apply solely to new technology undercut the justification that government must prevent duplication of services. Connecticut, for example, maintains a CON for “equipment utilizing technology not previously used in the state.” Alabama and the District of Columbia do something similar. It cannot be, as originally argued, that CON laws decrease costly duplication of services because, where a CON is required for brand-new technology, there is no duplication of service.

Some states may use CON laws as a tool to slow the growth of nursing homes and long-term care facilities. Florida, Indiana and Ohio’s CON programs exclusively regulate such facilities. The tendency of all states to heavily regulate nursing homes, intermediate care homes and long-term care homes could be due to concerns about controlling rising indigent care costs as the population ages.