The Effect of Certificate of Need Laws on All-Cause Mortality

The Effects of Certificate-of-Need Laws on the Quality of Hospital Medical Services

Certificate-of-need (CON) laws restrict entry into health services by requiring healthcare providers to seek approval from state healthcare regulators before making any major capital expenditures. An important question is whether CON laws influence the quality of medical services in CON law states. For instance, if CON laws actually lower the quality of medical services, they fail to achieve their intended effect. This paper tests the hypothesis that hospitals in states with CON laws provide lower-quality services than hospitals in states without CON laws. Our overall results suggest that CON regulations lead to lower-quality care for some quality measures and have little or no effect on other quality standards. The results remain consistent across several robustness tests.

Certificate of Need Laws and Health Care Use during the COVID-19 Pandemic

This paper investigates the impact of state-level Certificate-of-Need (CON) laws on COVID and non-COVID deaths in the United States during the SARS-CoV-2 pandemic. CON laws limit the expansion and acquisition of new medical services, such as new hospital beds. The coronavirus pandemic created a surge in demand for medical services, which might be exacerbated in some states that have CON laws. Our investigation focuses on mortality due to COVID and non-COVID reasons and understanding how these laws affect access to healthcare for illnesses that might require similar medical equipment to COVID patients. We find that states with high healthcare use due to COVID that reformed their CON laws during the pandemic had a reduction in mortality resulting from COVID-19, septicemia, diabetes, chronic lower respiratory disease, influenza or pneumonia, and Alzheimer’s Disease, relative to non-reforming CON states.

The Economics of a Bed Shortage: Certificate-of-Need Regulation and Hospital Bed Utilization during the COVID-19 Pandemic

Certificate-of-need (CON) laws are intended to restrain health care spending by limiting the acquisition of duplicative capital and the initiation of unnecessary services. Critics contend that need is difficult to objectively assess, especially considering the risks and uncertainty inherent in health care. We compare statewide bed utilization rates and hospital-level bed utilization rates in bed CON and non-bed CON states during the COVID-19 pandemic. Controlling for other possibly confounding factors, we find that states with bed CONs had 12 percent higher bed utilization rates and 58 percent more days in which more than 70 percent of their beds were used. Individual hospitals in bed CON states were 27 percent more likely to utilize all of their beds. States that relaxed CON requirements to make it easier for hospitals to meet the surge in demand did not experience any statistically significant decreases in bed utilization or number of days above 70 percent of capacity. Nor were hospitals in states that relaxed their CON requirements any less likely to use all their beds. Certificate-of-need laws seem to have exacerbated the risk of running out of beds during the COVID-19 pandemic. State efforts to relax these rules had little immediate effect on reducing this risk.

The impact of certificate of need laws on heart attack mortality: Evidence from county borders

Certificate of need (CON) regulations requires that health care providers obtain state approval before offering a new service or expanding existing facilities. The purported goal of CON regulations is to reduce health care costs by generating regional economies of scale and reducing redundant investments resulting from excessive competition. Critics of CON regulations note that the regulatory environment increases the costs of expansion and may incentivize health care providers to forgo capital investment, which can have a negative effect on health outcomes. To estimate the net effect of CON regulations, I use a border discontinuity design to measure within-regional heart attack mortality spanning 1968 to 1982. I estimate that CON regulations led to an increase in heart attack deaths, by 6%-10%, three years after the policy was enacted.

Utilization and Reimbursement Trends Based on Certificate of Need in Single-level Cervical Discectomy

OBJECTIVE

To compare utilization and reimbursement for cervical discectomy in certificate of need (CON) and non-CON states.

SUMMARY OF BACKGROUND DATA

Cervical discectomy is a commonly performed procedure, but little is known about utilization and reimbursement patterns in the CON setting.

INTRODUCTION

Cervical discectomy is increasingly used and remains effective. Increasing healthcare costs have led to decreased reimbursement and a push toward outpatient procedures. CON programs were established to ensure that expansion of medical facilities were within acceptable use; however, the literature on their impact in spine surgery is limited. The purpose of this study was to examine the impact of CON status on both reimbursement and utilization in cervical decompression in both inpatient and outpatient settings.

METHODS

We analyzed a private payer and Medicare database from 2007 to 2015. All single-level cervical discectomies were selected then split into CON and non-CON states. Each group was then further split into inpatient and outpatient. Utilization and reimbursement were analyzed using the compound annual growth rate (CAGR), with reimbursement adjusted by the US Bureau of Labor Statistics Consumer Price Index.

RESULTS

We identified 1,580 single level cervical decompressions in our study period: 888 were done in the inpatient setting, whereas 692 were done in the outpatient setting. Adjusted reimbursement only increased in the non-CON outpatient setting, with a CAGR of 2.0%. All other settings had decreased reimbursement. Utilization increased across all four settings, with the highest growth seen in the CON outpatient setting, with a CAGR of 12.7%. The highest average reimbursement was in the non-CON outpatient setting at $4,237.

DISCUSSION

Cervical discectomy is seeing increased utilization most rapidly in the outpatient setting, although reimbursement is declining with the exception of procedures done in the non-CON outpatient setting. Surgeons should be aware of these trends in the changing healthcare economic climate.

STUDY DESIGN

A retrospective database review.

Certificate-of-Need Programs Are Associated with a Reduced Incidence, Expenditure, and Rate of Complications with Respect to Knee Arthroscopy in the Medicare Population

BACKGROUND

To curb costs at the state level, improve care quality, and promote access to care, certificate-of-need (CON) laws were established in many states in 1974. It is not known how CON regulations have affected the provision of knee arthroscopy, one of the most common orthopedic procedures performed in the USA.

QUESTIONS/PURPOSES

We sought to characterize the effects of CON regulations on knee arthroscopy in the national Medicare population by examining trends in procedure volumes, comparing trends in procedure charges, evaluating distribution of procedure volumes between high-, mid-, and low-volume facilities, and comparing adverse event and complication rates after knee arthroscopy between states with and without CON regulations.

METHODS

States with CON regulations covering both inpatient and outpatient operating rooms formed the study group (n = 25 states) and were compared with states without CON laws or laws that did not cover operating rooms during the study period (n = 20 states). The 100% Medicare Standard Analytical Files from 2005 through 2014 were used to compare knee arthroscopy procedure volumes, charges, reimbursements, distribution of procedures based on facility volumes and adverse events between the two groups.

RESULTS

The rate of decrease in the incidence of knee arthroscopy was significantly greater in CON states than that in non-CON states. CON states also had significantly lower charges at all time points, and overall, compared with non-CON states. There were significantly more high- and mid-volume facilities in CON states than in non-CON states, and there were significantly more low-volume facilities in non-CON states than in CON states. Finally, there were significantly higher rates of emergency room visits within 30 days and infection within 6 months in non-CON states than in CON states.

CONCLUSIONS

CON regulations appear to have achieved several of their intended goals for knee arthroscopy. Further research is needed to determine if CON regulations affect the quality and sustainability of care provided to patients undergoing knee arthroscopy.

Association of for-profit hospital ownership status with intracranial hemorrhage outcomes and cost of care

OBJECTIVE

Much of the current discourse surrounding healthcare reform in the United States revolves around the role of the profit motive in medical care. However, there currently exists a paucity of literature evaluating the effect of for-profit hospital ownership status on neurological and neurosurgical care. The purpose of this study was to compare inpatient mortality, operation rates, length of stay, and hospital charges between private nonprofit and for-profit hospitals in the treatment of intracranial hemorrhage.

METHODS

This retrospective cohort study utilized data from the National Inpatient Sample (NIS) database. Primary outcomes, including all-cause inpatient mortality, operative status, patient disposition, hospital length of stay, total hospital charges, and per-day hospital charges, were assessed for patients discharged with a primary diagnosis of intracranial (epidural, subdural, subarachnoid, or intraparenchymal) hemorrhage, while controlling for baseline demographics, comorbidities, and interhospital differences via propensity score matching. Subgroup analyses by hemorrhage type were then performed, using the same methodology.

RESULTS

Of 155,977 unique hospital discharges included in this study, 133,518 originated from private nonprofit hospitals while the remaining 22,459 were from for-profit hospitals. After propensity score matching, mortality rates were higher in for-profit centers, at 14.50%, compared with 13.31% at nonprofit hospitals (RR 1.09, 95% CI 1.00-1.18; p = 0.040). Surgical operation rates were also similar (25.38% vs 24.42%; RR 0.96, 95% CI 0.91-1.02; p = 0.181). Of note, nonprofit hospitals appeared to be more intensive, with intracranial pressure monitor placement occurring in 2.13% of patients compared with 1.47% in for-profit centers (RR 0.69, 95% CI 0.54-0.88; p < 0.001). Discharge disposition was also similar, except for higher rates of absconding at for-profit hospitals (RR 1.59, 95% CI 1.12-2.27; p = 0.018). Length of stay was greater among for-profit hospitals (mean ± SD: 7.46 ± 11.91 vs 6.50 ± 8.74 days, p < 0.001), as were total hospital charges ($141,141.40 ± $218,364.40 vs $84,863.54 ± $136,874.71 [USD], p < 0.001). These findings remained similar even after segregating patients by subgroup analysis by hemorrhage type.

CONCLUSIONS

For-profit hospitals are associated with higher inpatient mortality, lengths of stay, and hospital charges compared with their nonprofit counterparts.

Association of State Certificate of Need Regulation With Procedural Volume, Market Share, and Outcomes Among Medicare Beneficiaries

IMPORTANCE

Certificate of need laws provide state-level regulation of health system expenditure. These laws are intended to limit spending and control hospital expansion in order to prevent excess capacity and improve quality of care. Several states have recently introduced legislation to modify or repeal these regulations, as encouraged by executive order 13813, issued in October 2017 by the Trump administration.

OBJECTIVE

To evaluate the difference in markers of hospital activity and quality by state certificate of need status. These markers include hospital procedural volume, hospital market share, county-level procedures per 10 000 persons, and patient-level postoperative outcomes.

DESIGN, SETTING, AND PARTICIPANTS

A cross-sectional study involving Medicare beneficiaries aged 65 years or older who underwent 1 of the following 10 procedures from January 1, 2016, through November 30, 2018: total knee or hip arthroplasty, coronary artery bypass grafting, colectomy, ventral hernia repair, lower extremity vascular bypass, lung resection, pancreatic resection, cystectomy, or esophagectomy.

EXPOSURES

State certificate of need regulation status as determined by data from the National Conference of State Legislatures.

MAIN OUTCOMES AND MEASURES

Outcomes of interest included hospital procedural volume; hospital market share (range, 0-1; reflecting 0%-100% of market share); county-level procedures per 10 000 persons; and patient-level postoperative 30-day mortality, surgical site infection, and readmission.

RESULTS

A total of 1 545 952 patients (58.0% women; median age 72 years; interquartile range, 68-77 years) at 3631 hospitals underwent 1 of the 10 operations. Of these patients, 468 236 (30.3%) underwent procedures in the 15 states without certificate of need regulations and 1 077 716 (69.7%) in the 35 states with certificate of need regulations. The total number of procedures ranged between 729 855 total knee arthroplasties (47.21%) and 4558 esophagectomies (0.29%). When comparing states without vs with certificate of need regulations, there were no significant differences in overall hospital procedural volume (median hospital procedure volume, 241 vs 272 operations per hospital for 3 years; absolute difference, 31; 95% CI, -27.64 to 89.64; P = .30). There were no statistically significant differences between states without vs with certificate of need regulations for median hospital market share (median, 28% vs 52%; absolute difference, 24%; 95% CI, -5% to 55%; P = .11); procedure rates per 10 000 Medicare-eligible population (median, 239.23 vs 205.41 operations per Medicare-eligible population in 3 years; absolute difference, 33.82; 95% CI, -84.08 to 16.43; P = .19); or 30-day mortality (1.17% vs 1.33%, odds ratio [OR], 1.04; 95% CI, 0.93 to 1.16; P = .52), surgical site infection (1.24% vs 1.25%; OR, 0.93; 95% CI, 0.83 to 1.04; P = .21), or readmission rate (9.69% vs 8.40%; OR, 0.80; 95% CI, 0.57 to 1.12; P = .19).

CONCLUSIONS AND RELEVANCE

Among Medicare beneficiaries who underwent a range of surgical procedures from 2016 through 2018, there were no significant differences in markers of hospital volume or quality between states without vs with certificate of need laws. Policy makers should consider reevaluating whether the current approach to certificate of need regulation is achieving the intended objectives and whether those objectives should be updated.

Certificate-of-Need State Laws and Elective Posterior Lumbar Fusions: Is It Time to Repeal the Mandate?

OBJECTIVES

Our study aimed to assess whether elective posterior lumbar fusions (PLFs) performed in states with Certificate-of-Need (CON) laws versus states without CON laws had lower utilization rates, lower costs, and better quality of care.

METHODS

The 2005-2014 100% Medicare Standard Analytical File was queried to identify patients undergoing elective 1- to 3-level PLF. Differences in per-capita utilization, 90-day reimbursements, and proportion of high-volume between CON and No-CON states were reported. Multivariate analyses were used to analyze 90-day complications and readmissions.

RESULTS

A total of 188,687 patients underwent an elective 1- to 3-level PLF in a CON state and 167,642 patients in a No-CON state during 2005-2014. The average per capita utilization of PLFs was lower in CON states as compared with No-CON states (14.5 vs. 15.4 per 10,000 population; P < 0.001). Average 90-day reimbursements between CON and No-CON states differed by a small amount ($22,115 vs. $21,802). CON states had a higher proportion of high-volume facilities (CON vs. No CON-40.9% vs. 29.9%; P < 0.05) and lower proportion of low-volume facilities (CON vs. No-CON-37.2% vs. 45.0%; P < 0.05). PLFs performed in CON states had slightly lower odds of 90-day complications (odds ratio 0.97 [95% confidence interval 0.96-0.99]; P < 0.001) and readmissions (odds ratio 0.95 [95% confidence interval 0.93-0.97]; P < 0.001).

CONCLUSIONS

The presence of CON laws was associated with lower utilization of elective 1- to 3-level PLFs and a greater number of high-volume facilities. However, their effect on quality of care, via reduction of 90-day readmissions and 90-day complications, is minimally significant.

Does ACDF Utilization and Reimbursement Change Based on Certificate of Need Status?

INTRODUCTION

Anterior cervical discectomy and fusion (ACDF) remain an effective treatment option for multiple pathologies of the cervical spine. As the health care economic climate has changed, so have reimbursements with a concomitant push toward outpatient procedures. Certificate of Need (CON) programs were established in response to burgeoning health care costs which require states to demonstrate need before expansion of medical facilities. The impact of this program on spine surgery is largely unknown. The purpose of this study was to examine the impact of CON status on reimbursement and utilization trends of ACDF in both inpatient and outpatient settings.

MATERIALS AND METHODS

We queried a combined private payer and Medicare database from 2007 to 2015. All single-level ACDFs were identified. We then split each procedure into those performed in CON versus non-CON states. We then further split each group into the inpatient and outpatient settings. Compound annual growth rate (CAGR) was used to compare utilization and reimbursement trends. Reimbursement was adjusted for inflation using the United States Bureau of Labor Statistics consumer price index.

RESULTS

A total of 32,727 single-level ACDFs were identified, of which 28,441 were performed in the inpatient setting, and 4286 were performed in the outpatient setting. Reimbursement decreased across all settings, with the most pronounced decrease in the non-CON outpatient setting with an adjusted CAGR of -11.0%. Utilization increased across all groups, although the fastest growth was seen in the outpatient CON setting with a CAGR of 47.7%, and the slowest growth seen in the inpatient non-CON setting at a CAGR of 12.9%.

CONCLUSIONS

ACDF utilization increased most rapidly in the outpatient setting, and CON status did not appear to hinder growth. Reimbursement decreased across all settings, with the outpatient setting in non-CON states most affected. Surgeons should be aware of these trends in the changing health care environment.

Certificate-of-Need State Laws and Total Hip Arthroplasty

BACKGROUND

Many states have certificate-of-need (CON) programs requiring governmental approval to open or expand healthcare services, with the goal of limiting cost and coordinating utilization of healthcare resources. The purpose of the present study was to evaluate the associations between these state-level CON regulations and total hip arthroplasty (THA).

METHODS

States were designated as CON or non-CON based on existing laws. The 100% Medicare Standard Analytic Files from 2005 to 2014 were used to compare THA procedure volumes, charges, reimbursements, and distribution of procedures based on facility volumes between the CON and non-CON states. Adverse postoperative outcomes were also analyzed.

RESULTS

The per capita incidence of THA was higher in non-CON states than CON states at each time period and overall (P < .0001). However, the rate of change in THA incidence over the time period was higher in CON states (1.0 per 10,000 per year) compared to non-CON states (0.68 per 10,000 per year) although not statistically significant. Length of stay was higher and a higher percentage of patients received care in high-volume hospitals in CON states (both P < .0001). No meaningful differences in postoperative complications were found.

CONCLUSION

CON laws did not appear to have limited the growth in incidence of THA nor improved quality of care or outcomes during the study time period. It does appear that CON laws are associated with increased concentration of THA procedures at higher volume facilities. Given the inherent potential confounding population and geographic factors, additional research is needed to confirm these findings.

Appropriateness of Percutaneous Coronary Intervention: Appropriate Use Criteria Outperform Certificate of Need

See Article by Chui et al.

Certificate-of-Need State Laws and Total Knee Arthroplasty

BACKGROUND

Many states in the United States have certificate-of-need (CON) programs designed to restrain health care costs and prevent overutilization of health care resources. The goal of this study was to characterize the associations between CON regulations and total knee arthroplasty (TKA) by comparing states with and without CON programs.

METHODS

Publicly available data were used to classify states in to CON or non-CON categories. The 100% Medicare Standard Analytical Files from 2005 through 2014 were then used to compare primary TKA procedure volumes, charges, reimbursements, and distribution of procedures based on facility volumes between the groups. Adverse events such as infection and emergency room visits after TKA were also evaluated.

RESULTS

Although CON status was associated with lower per capita utilization of TKA, the annual incidence of TKA appears to have increased over time more rapidly in states with CON laws compared with non-CON states (overall increase of 5.6% vs 2.3%, P < .01). When normalized to the Medicare population, the incidence of TKA increased 2.0% in CON states, whereas it actually decreased 7.2% in states without CON regulations (P = .011). Average reimbursement (and thus Medicare spend) was 5% to 10% lower in non-CON states at all time points (P < .0001). In non-CON states, relatively more TKAs appear to be performed in lower volume hospitals. Examination of adverse events rates did not reveal any strong associations between any adverse outcome and CON status.

CONCLUSION

CON programs appear to have influenced the delivery of care for TKA. Although our data suggest that these laws are associated with lower per capita utilization of TKA and the use of higher-volume facilities, we were unable to detect any strong evidence that CON regulations have been associated with improved quality of care or have limited growth in the utilization of this procedure over time. Confounding population and geographic factors may influence these findings and further study is needed to determine whether or not these programs have served their purpose and should be retained.