Certificate of Need (CON) for cardiac care: controversy over the contributions of CON

Associations Between Certificate of Need Policies and Hospice Quality Outcomes

BACKGROUND

Certificate of need (CON) laws are state-based regulations requiring approval of new healthcare entities and capital expenditures. Varying by state, these regulations impact hospices in 14 states and DC, with several states re-examining provisions.

AIM

This cross-sectional study examined the association of CON status on hospice quality outcomes using the hospice item set metric (HIS).

DESIGN

Data from the February 2022 Medicare Hospice Provider and General Information reports of 4870 US hospices were used to compare group means of the 8 HIS measures across CON status. Multiple regression analysis was used to predict HIS outcomes by CON status while controlling for ownership and size.

RESULTS

Approximately 86% of hospices are in states without a hospice CON provision. The unadjusted mean HIS scores for all measures were higher in CON states (M range 94.40-99.59) than Non-CON (M range 90.50-99.53) with significant differences in all except treatment preferences. In the adjusted model, linear regression analyses showed hospice CON states had significantly higher HIS ratings than those from Non-CON states for beliefs and values addressed (β = .05, P = .009), pain assessment (β = .05, P = .009), dyspnea treatment (β = .08, P < .001) and the composite measure (β = .09, P < .001). Treatment preferences, pain screening, dyspnea screening, and opioid bowel treatment were not statistically significant (P > .05).

CONCLUSION

The study suggests that CON regulations may have a modest, but beneficial impact on hospice-reported quality outcomes, particularly for small and medium-sized hospices. Further research is needed to explore other factors that contribute to HIS outcomes.

Government Regulation and Percutaneous Coronary Intervention Volume, Access and Outcomes: Insights From the Washington State Cardiac Care Outcomes Assessment Program

Background

It is unclear how to geographically distribute percutaneous coronary intervention (PCI) programs to optimize patient outcomes. The Washington State Certificate of Need program seeks to balance hospital volume and patient access through regulation of elective PCI.

Methods and Results

We performed a retrospective cohort study of all non‐Veterans Affairs hospitals with PCI programs in Washington State from 2009 to 2018. Hospitals were classified as having (1) full PCI services and surgical backup (legacy hospitals, n=17); (2) full services without surgical backup (new certificate of need [CON] hospitals, n=9); or (3) only nonelective PCI without surgical backup (myocardial infarction [MI] access hospitals, n=9). Annual median hospital‐level volumes were highest at legacy hospitals (605, interquartile range, 466–780), followed by new CON, (243, interquartile range, 146–287) and MI access, (61, interquartile range, 23–145). Compared with MI access hospitals, risk‐adjusted mortality for nonelective patients was lower for legacy (odds ratio [OR], 0.59 [95% CI, 0.48–0.72]) and new‐CON hospitals (OR, 0.55 [95% CI, 0.45–0.65]). Legacy hospitals provided access within 60 minutes for 90% of the population; addition of new CON and MI access hospitals resulted in only an additional 1.5% of the population having access within 60 minutes.

Conclusions

Many PCI programs in Washington State do not meet minimum volume standards despite regulation designed to consolidate elective PCI procedures. This CON strategy has resulted in a tiered system that includes low‐volume centers treating high‐risk patients with poor outcomes, without significant increase in geographic access. CON policies should re‐evaluate the number and distribution of PCI programs.

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.

Concept review of regionalized systems of acute care: Is regionalization the next frontier in sepsis care?

Regionalization has become a buzzword in US health care policy. Regionalization, however, has varied meanings, and definitions have lacked contextual information important to understanding its role in improving care. This concept review is a comprehensive primer and summation of 8 common core components of the national models of regionalization informed by text-based analysis of the writing of involved organizations (professional, regulatory, and research) guided by semistructured interviews with organizational leaders. Further, this generalized model of regionalized care is applied to sepsis care, a novel discussion, drawing on existing small-scale applications. This discussion highlights the fit of regionalization principles to the sepsis care model and the actualized and perceived potential benefits. The principal aim of this concept review is to outline regionalization in the United States and provide a roadmap and novel discussion of regionalized care integration for sepsis care.

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.

Competition-driven physician-induced demand

This paper empirically investigates how competition affects physicians' opportunistic behavior in the context of the utilization of MRI scanners. We examine micro-panel data on Japanese hospitals, where we observe how physicians change their usage of MRI scanners in response to MRI adoption by nearby hospitals. We identify competition-driven physician-induced demand: Hospitals lose patients because of MRI adoption by nearby hospitals, and, to compensate for this loss, physicians perform more MRI scans per patient. Although competition may benefit consumers through better access to MRI scanners, it also causes additional physician-induced demand.

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.

Association of low center performance evaluations and pediatric heart transplant center behavior in the United States

BACKGROUND

To date, no study has evaluated the effects of low center performance evaluations (CPE) on pediatric heart transplant center behavior. We sought to assess the impact of low CPE flags on pediatric heart transplant center listing and transplant volumes and center recipient and donor characteristics.

METHODS

We included centers performing at least 10 pediatric (age <18 years) transplants during the Scientific Registry of Transplant Recipients reporting period January 2009-June 2011 and evaluated consecutive biannual program specific reports until the last reporting period January 2016-June 2018. We evaluated changes in center behavior at following time points: a year before flagging, a year and two years after the flag; and at last reporting period.

RESULTS

During our study period, 24 pediatric centers were non-flagged and 6 were flagged. Compared to non-flagged centers, there was a decline in candidate listings in flagged centers at the last reporting period (mean increase of 5.5 ± 12.4 listings vs"?> mean decrease of 14.0 ± 14.9 listings; p = .003). Similarly, the number of transplants declined in flagged centers (mean increase of 2.6 ± 9.6 transplants vs"?> mean decrease of 10.0 ± 12.8 transplants; p = .012). Flagged centers had declines in listings for patients with restrictive cardiomyopathy, re-transplant, renal dysfunction, those on mechanical ventilation and extracorporeal membrane oxygenation. There was no significant change in donor characteristics between flagged and non-flagged centers.

CONCLUSIONS

Low CPE may have unintended negative consequences on center behavior leading to declines in listing and transplant volumes and potentially leading to decreased listing for higher risk recipients.

Models for Heart Failure Admissions and Admission Rates, 2016 through 2018

BACKGROUND

Approximately 6.5 to 6.9 million individuals in the United States have heart failure, and the disease costs approximately $43.6 billion in 2020. This research provides geographical incidence and cost models of this disease in the U.S. and explanatory models to account for hospitals' number of heart failure DRGs using technical, workload, financial, geographical, and time-related variables.

METHODS

The number of diagnoses is forecast using regression (constrained and unconstrained) and ensemble (random forests, extra trees regressor, gradient boosting, and bagging) techniques at the hospital unit of analysis. Descriptive maps of heart failure diagnostic-related groups (DRGs) depict areas of high incidence. State- and county-level spatial and non-spatial regression models of heart failure admission rates are performed. Expenditure forecasts are estimated.

RESULTS

The incidence of heart failure has increased over time with the highest intensities in the East and center of the country; however, several Northern states have seen large increases since 2016. The best predictive model for the number of diagnoses (hospital unit of analysis) was an extremely randomized tree ensemble (predictive R² = 0.86). The important variables in this model included workload metrics and hospital type. State-level spatial lag models using first-order Queen criteria were best at estimating heart failure admission rates (R² = 0.816). At the county level, OLS was preferred over any GIS model based on Moran's I and resultant R²; however, none of the traditional models performed well (R² = 0.169 for the OLS). Gradient-boosted tree models predicted 36% of the total sum of squares; the most important factors were facility workload, mean cash on hand of the hospitals in the county, and mean equity of those hospitals. Online interactive maps at the state and county levels are provided.

CONCLUSIONS

Heart failure and associated expenditures are increasing. Costs of DRGs in the study increased $61 billion from 2016 through 2018. The increase in the more expensive DRG 291 outpaced others with an associated increase of $92 billion. With the increase in demand and steady-state supply of cardiologists, the costs are likely to balloon over the next decade. Models such as the ones presented here are needed to inform healthcare leaders.

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 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.

Certificate of need laws: a systematic review and cost-effectiveness analysis

BACKGROUND

Certificate of Need (CON) laws, currently in place in 35 US states, require certain health care providers to obtain a certification of their economic necessity from a state board before opening or undertaking a major expansion. We conduct the first systematic review and cost-effectiveness analysis of these laws.

METHODS

We review 90 articles to summarize the evidence on how certificate of need laws affect regulatory costs, health expenditures, health outcomes, and access to care. We use the findings from the systematic review to conduct a cost-effectiveness analysis of CON.

RESULTS

The literature provides mixed results, on average finding that CON increases health expenditures and overall elderly mortality while reducing heart surgery mortality. Our cost-effectiveness analysis estimates that the costs of CON laws somewhat exceed their benefits, although our estimates are quite uncertain.

CONCLUSIONS

The literature has not yet reached a definitive conclusion on how CON laws affect health expenditures, outcomes, or access to care. While more and higher quality research is needed to reach confident conclusions, our cost-effectiveness analysis based on the existing literature shows that the expected costs of CON exceed its benefits.

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.

Impact of Global Budget Revenue Policy on Emergency Department Efficiency in the State of Maryland

INTRODUCTION

On January 1, 2014, the State of Maryland implemented the Global Budget Revenue (GBR) program. We investigate the impact of GBR on length of stay (LOS) for inpatients in emergency departments (ED) in Maryland.

METHODS

We used the Hospital Compare data reports from the Centers for Medicare and Medicaid Services (CMS) and CMS Cost Reports Hospital Form 2552-10 from January 1, 2012-March 31, 2016, with GBR hospitals from Maryland and hospitals from West Virginia (WV), Delaware (DE), and Rhode Island (RI). We implemented difference-in-differences analysis and investigated the impact of GBR implementation on the LOS or ED1b scores of Maryland hospitals using a mixed-effects model with a state-level fixed effect, a hospital-level random effect, and state-level heterogeneity.

RESULTS

The GBR impact estimator was 9.47 (95% confidence interval [CI], 7.06 to 11.87, p-value<0.001) for Maryland GBR hospitals, which implies, on average, that GBR implementation added 9.47 minutes per year to the time that hospital inpatients spent in the ED in the first two years after GBR implementation. The effect of the total number of hospital beds was 0.21 (95% CI, 0.089 to 0.330, p-value = 0 .001), which suggests that the bigger the hospital, the longer the ED1b score. The state-level fixed effects for WV were -106.96 (95% CI, -175.06 to -38.86, p-value = 0.002), for DE it was 6.51 (95% CI, -8.80 to 21.82, p-value=0.405), and for RI it was -54.48 (95% CI, -82.85 to -26.10, p-value<0.001).

CONCLUSION

Our results indicate that GBR implementation has had a statistically significant negative impact on the efficiency measure ED1b of Maryland hospital EDs from January 2014 to April 2016. We also found that the significant state-level fixed effect implies that the same inpatient might experience different ED processing times in each of the four states that we studied.

Do certificate of need regulations impact total shoulder arthroplasty volumes and associated complication rates?

Objectives: Certificates of Need (CON) laws were introduced to improve resource utilization and reduce unnecessary health-care expansion. While many states have repealed their use, the debate continues as to their efficacy in achieving these goals. As such, we asked: 1) Are there differences in TSA incidence in CON/non-CON states? 2) Are there differences in procedural charges or reimbursement between CON/non-CON states? 3) Are there differences in the proportion of cases treated in high-, mid- or low-volume facilities between groups? 4) Are there differences in complications and length-of-stay (LOS) between high-volume and low-volume facilities? Methods: The 100% Medicare Standard Analytic files were queried for all TSA between 2005 and 2013, with minimum 1-year follow-up. Publically available data was used to identify states that upheld or repealed CON regulations, and comparisons were subsequently made between groups for normalized incidence of TSA per year and procedural charges and reimbursement rates. Comparisons were then made regarding the distribution of high-, mid- and low volume facilities, post-operative complication rates, and length-of-stay (LOS) between the different volume centers. Results: 167,288 patients undergoing TSA were identified. Normalized rates of TSA increased in both groups. Non-CON states had higher per-patient reimbursement, but paradoxically lower reimbursement rates compared with CON states. CON regulations lead to a greater proportion of procedures being performed in high-volume facilities compared with non-CON (p = 0.002). Finally, 30-day and 1-year complications, and length-of-stay, were significantly lower in high-volume facilities versus low-volume facilities (p ≤ 0.016). Conclusions: Where upheld, CON regulations contributed to a notable increase in the percentage of procedures performed in high-volume facilities, which in turn lead to a significant reduction in post-operative complications and LOS. Further study is necessary to definitely establish this relationship and the utility of CON regulations for the delivery of TSA care, particularly as it relates to clinical outcomes.

Entry regulation and the effect of public reporting: Evidence from Home Health Compare

Economic theory suggests that competition and information are complementary tools for promoting health care quality. The existing empirical literature has documented this effect only in the context of competition among existing firms. Extending this literature, we examine competition driven by the entry of new firms into the home health care industry. In particular, we use the certificate of need (CON) law as a proxy for the entry of firms to avoid potential endogeneity of entry. We find that home health agencies in non-CON states improved quality under public reporting significantly more than agencies in CON states. Because home health care is a labor-intensive and capital-light industry, the state CON law is a major barrier for new firms to enter. Our findings suggest that policymakers may jointly consider information disclosure and entry regulation to achieve better quality in home health care.

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.

Mandatory public reporting of cardiac surgery outcomes: The 2003 to 2014 Massachusetts experience

OBJECTIVES

Beginning in 2002, all 14 Massachusetts nonfederal cardiac surgery programs submitted Society of Thoracic Surgeons (STS) National Database data to the Massachusetts Data Analysis Center for mandatory state-based analysis and reporting, and to STS for nationally benchmarked analyses. We sought to determine whether longitudinal prevalences and trends in risk factors and observed and expected mortality differed between Massachusetts and the nation.

METHODS

We analyzed 2003 to 2014 expected (STS predicted risk of operative [in-hospital + 30-day] mortality), observed, and risk-standardized isolated coronary artery bypass graft mortality using Massachusetts STS data (N = 39,400 cases) and national STS data (N = 1,815,234 cases). Analyses included percentage shares of total Massachusetts coronary artery bypass graft volume and expected mortality rates of 2 hospitals before and after outlier designation.

RESULTS

Massachusetts patients had significantly higher odds of diabetes, peripheral vascular disease, low ejection fraction, and age ≥75 years relative to national data and lower odds of shock (odds ratio, 0.66; 99% confidence interval, 0.53-0.83), emergency (odds ratio, 0.57, 99% confidence interval, 0.52-0.61), reoperation, chronic lung disease, dialysis, obesity, and female sex. STS predicted risk of operative [in-hospital + 30-day] mortality for Massachusetts patients was higher than national rates during 2003 to 2007 (P < .001) and no different during 2008 to 2014 (P = .135). Adjusting for STS predicted risk of operative [in-hospital + 30-day] mortality, Massachusetts patients had significantly lower odds (odds ratio, 0.79; 99% confidence interval, 0.66-0.96) of 30-day mortality relative to national data. Outlier programs experienced inconsistent, transient influences on expected mortality and their percentage shares of Massachusetts coronary artery bypass graft cases.

CONCLUSIONS

During 12 years of mandatory public reporting, Massachusetts risk-standardized coronary artery bypass graft mortality was consistently and significantly lower than national rates, expected rates were comparable or higher, and evidence for risk aversion was conflicting and inconclusive.

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.

Primary percutaneous coronary intervention at centers with and without on-site surgical support: Insights from the Blue Cross Blue Shield of Michigan Cardiovascular Consortium (BMC2)

BACKGROUND

Primary percutaneous coronary intervention (PPCI) is being increasingly performed nationally at sites without on-site cardiac surgery; however, recent guidelines only provide a Class IIa recommendation for this practice. The state of Michigan has permitted PPCI without on-site surgery under a closely monitored system that mandates auditing of all procedures and quarterly feedback on quality and outcomes. This study sought to compare outcomes of patients undergoing PPCI at centers with and without on-site surgery in the state of Michigan.

METHODS

Consecutive patients who underwent PPCI at 47 hospitals in Michigan from January 2010 to December 2015 were included. From this cohort, 4,091 patients from sites with and without on-site cardiac surgery were propensity matched in a 1:1 fashion to compare baseline characteristics, procedural details, and in-hospital outcomes.

RESULTS

Of the 25,886 PPCIs performed at 47 hospitals in Michigan from 2010 to 2015, 21,610 (83.5%) were performed at sites with on-site surgery and 4,276 (16.5%) at sites without on-site surgery. Using propensity score matched cohorts (4,091 patients for each site type), we found no significant differences in baseline characteristics. Overall mortality (5.4% vs 5.8%; P=.442); composite outcome of in-hospital mortality, contrast-induced nephropathy, bleeding, and stroke (13.8% vs 12.8%; P=.152); and individual outcomes within the composite group showed no significant differences. Additionally, there were no clinically meaningful differences in rates of urgent/emergent coronary artery bypass graft or length of stay. Significant differences, however, were found in procedural access site, antiplatelet therapy, contrast volume, and anticoagulant strategy.

CONCLUSIONS

Primary PCI performed at centers with and without cardiac surgery have comparable outcomes and complication rates when performed with close monitoring of quality and outcomes.

Does certificate of need law enhance competition in inpatient care market? An empirical analysis

This article investigates the impact of Certificate of Need (CON) laws on competition in the inpatient care market. One of the major criticisms of these laws is that it may hinder competition in the health care market, which can lead to higher prices. However, from a theoretical standpoint, CON laws could also promote competition by limiting excessive expansion from incumbents. Our main conclusion is that CON laws by and large enhanced competition in the inpatient market during the period of our study. This indicates that the effects of CON laws to hinder predatory behavior could dominate its effects of preventing new entrants into the inpatient care market. We do not find statistically significant evidence to reject the exogeneity assumption of either CON laws or their stringency in our study. We also find factors such as proportion of population aged 18-44, proportion of Asian American population, obesity rate, political environment, etc., in a state significantly impact competition. Our findings could shed some light to public policy makers when deciding the appropriate health programs or legislative framework to promote health care market competition and thereby facilitate quality health care.

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

OBJECTIVE

To test how Certificate of Need laws affect all-cause mortality in the United States.

DATA SOURCES

The data of 1992-2011 all-cause mortality are from the Center for Disease Control's Compressed Mortality File; control variables are from the Current Population Survey, Behavioral Risk Factor Surveillance System, and Area Health Resources File; and data on Certificate of Need laws are from Stratmann and Russ ().

STUDY DESIGN

Using fixed- and random-effects regressions, I test how the scope of state Certificate of Need laws affects all-cause mortality within US counties.

PRINCIPAL FINDINGS

Certificate of Need laws have no statistically significant effect on all-cause mortality. Point estimates indicate that if they have any effect, they are more likely to increase mortality than decrease it.

CONCLUSIONS

Proponents of Certificate of Need laws have claimed that they reduce mortality by concentrating more care into fewer, larger facilities that engage in learning-by-doing. However, I find no evidence that these laws reduce all-cause mortality.

How Do Hospitals Respond to Market Entry? Evidence from a Deregulated Market for Cardiac Revascularization

Regulatory entry barriers to hospital service markets, namely Certificate of Need (CON) regulations, are enforced in many US states. Policy makers in other states are considering reinstating CON policies in tandem with service expansions mandated under the Affordable Care Act. Although previous studies examined the volume effects of CON, demand responses to actual entry into local hospital markets are not well understood. In this paper, we empirically examine the demand-augmenting, demand-redistribution, and risk-allocation effects of hospital entry by studying the cardiac revascularization markets in Pennsylvania, a state in which dynamic market entry occurred after repeal of CON in 1996. Results from interrupted time-series analyses indicate demand-augmenting effects for coronary artery bypass graft (CABG) and business-stealing effects for percutaneous coronary intervention (PCI) procedures: high entrant market share mitigated the declining incidence of CABG, but it had no significant effect on the rising trend in PCI use, among patients with coronary artery disease. We further find evidence that entry by new cardiac surgery centers tended to sort high-severity patients into the more invasive CABG procedure and low-severity patients into the less invasive PCI procedures. These findings underscore the importance of considering market-level strategic responses by hospitals when regulatory barriers are rescinded.

Innovative Payment Mechanisms in Maryland Hospitals: An Empirical Analysis of Readmissions under Total Patient Revenue

BACKGROUND

The state of Maryland implemented innovative budgeting of outpatient and inpatient services in eight rural hospitals under the Total Patient Revenue (TPR) system in July, 2010.

METHODS

This paper uses data on Maryland discharges from the 2009-2011 Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID). Individual inpatient discharges from eight treatment hospitals and three rural control hospitals (n=374,353) are analyzed. To get robust estimates and control for trends in the state, we also compare treatment hospitals to all hospitals in Maryland that report readmissions (n=1,997,164). Linear probability models using the difference-in-differences approach with hospital fixed effects are estimated to determine the effect of the innovative payment mechanisms on hospital readmissions, controlling for patient demographics and characteristics.

RESULTS

Difference-in-differences estimates show that after implementation of TPR in the treatment hospitals, there were no statistically significant changes in the predicted probability of readmissions.

CONCLUSIONS

Early evidence from the TPR program shows that readmissions were not affected in the 18 months after implementation.

IMPLICATIONS

: As the health care system innovates, it is important to evaluate the success of these innovations. One of the goals of TPR was to lower readmission rates, however these rates did not show consistent downward trends after implementation. Our results suggest that payment innovations that provide financial incentives to ensure patients receive care in the most appropriate setting while maintaining quality of care may not have immediate effects on commonly used measures of hospital quality, particularly for rural hospitals that may lack coordinated care delivery infrastructure.

The Effect of Entry Regulation in the Health Care Sector: the Case of Home Health

The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined health care markets and frequently cross state boundaries. We find that CON states use home health less frequently, but system-wide rehospitalization rates, overall Medicare expenditures, and home health practice patterns are similar. Removing CON for home health would have negligible system-wide effects on health care costs and quality.

Copayments did not reduce medicaid enrollees' nonemergency use of emergency departments

Eager to reduce unnecessary use of hospital emergency departments by Medicaid enrollees, states are increasingly implementing cost sharing for nonemergency visits. This paper uses monthly data from the 2001-2006 Medical Expenditure Panel Surveys (MEPS) to examine how changes in nine states' copayment policies influence enrollees' use of emergency departments. The results suggest that requiring copayments for nonemergency visits did not decrease emergency department use by Medicaid enrollees. Future research should examine more closely the effects at the state level and investigate whether these copayments affected the use of other services, such as hospitalizations or visits to physicians by Medicaid enrollees.

Certificate of need programs, intensity modulated radiation therapy use and the cost of prostate cancer care

PURPOSE

Certificate of need programs are a primary mechanism to regulate the use and cost of health care services at the state level. The effect of certificate of need programs on the use of intensity modulated radiation therapy and the increasing costs of prostate cancer care is unknown. We compared the use of intensity modulated radiation therapy and change in prostate cancer health care costs in regions with vs without active certificate of need programs.

MATERIALS AND METHODS

This population based, observational study using SEER (Surveillance, Epidemiology, and End Results)-Medicare linked data from 2002 through 2009 was comprised of 13,814 men treated for prostate cancer in 3 regions with active certificate of need programs (CON Yes) vs 44,541 men treated for prostate cancer in 9 regions without active certificate of need programs (CON No). We assessed intensity modulated radiation therapy use relative to other prostate cancer definitive therapies and overall prostate cancer health care costs with respect to certificate of need status.

RESULTS

In propensity score adjusted analyses, intensity modulated radiation therapy use increased from 2.3% to 46.4% of prostate cancer definitive therapies in CON Yes regions vs 11.3% to 41.7% in CON No regions from 2002 to 2009. Furthermore, we observed greater intensity modulated radiation therapy use with time in CON Yes vs No regions (p <0.001). Annual cost growth did not differ between CON Yes vs No regions (p = 0.396).

CONCLUSIONS

Certificate of need programs were not effective in limiting intensity modulated radiation therapy use or attenuating prostate cancer health care costs. There remains an unmet need to control the rapid adoption of new, more expensive therapies for prostate cancer that have limited cost and comparative effectiveness data.

State deregulation and Medicare costs for acute cardiac care

Past literature suggests that Certificate of Need (CON) regulations for cardiac care were ineffective in improving quality, but less is known about the effect of CON on patient costs. We analyzed Medicare data for 1991-2002 to test whether states that dropped CON experienced changes in costs or reimbursements for coronary artery bypass graft (CABG) surgery or percutaneous coronary interventions. We found that states that dropped CON experienced lower costs per patient for CABG but not for percutaneous coronary intervention. Average Medicare reimbursement was lower for both procedures in states that dropped CON. The cost savings from removing CON regulations slightly exceed the total fixed costs of new CABG facilities that entered after deregulation. Assuming continued cost savings past 2002, the savings from deregulating CABG surgery outweigh the fixed costs of new entry. Thus, CON regulations for CABG may not be justified in terms of either improving quality or controlling cost growth.

Saving Money or Just Saving Lives? Improving the Productivity of US Health Care Spending

There is growing concern over the rising share of the US economy devoted to health care spending. Fueled in part by demographic transitions, unchecked increases in entitlement spending will necessitate some combination of substantial tax increases, elimination of other public spending, or unsustainable public debt. This massive increase in health spending might be warranted if each dollar devoted to the health care sector yielded real health benefits, but this does not seem to be the case. Although we have seen remarkable gains in life expectancy and functioning over the past several decades, there is substantial variation in the health benefits associated with different types of spending. Some treatments, such as aspirin, beta blockers, and flu shots, produce a large health benefit per dollar spent. Other more expensive treatments, such as stents for cardiovascular disease, are high value for some patients but poor value for others. Finally, a large and expanding set of treatments, such as proton-beam therapy or robotic surgery, contributes to rapid increases in spending despite questionable health benefits. Moving resources toward more productive uses requires encouraging providers to deliver and patients to consume high-value care, a daunting task in the current political landscape. But widespread inefficiency also offers hope: Given the current distribution of resources in the US health care system, there is tremendous potential to improve the productivity of health care spending and the fiscal health of the United States.

The impact of certificate of need programs on neonatal intensive care units

OBJECTIVE

To determine the impact of state certificate of need programs (CON) on the number of hospitals with neonatal intensive care units (NICU) and the number of NICU beds.

STUDY DESIGN

The presence of a CON program was verified from each state's department of health. Multivariable regression models determined the association between the absence of a CON program and each outcome after controlling for socioeconomic and demographic differences between states.

RESULT

A total of 30 states had CON programs that oversaw NICUs in 2008. Absence of such programs was associated with more hospitals with a NICU (Rate Ratio (RR) 2.06, 95% CI 1.74 to 2.45) and NICU beds (RR 1.96, 95% CI 1.89 to 2.03) compared with states with CON legislation, and increased all-infant mortality rates in states with a large metropolitan area.

CONCLUSION

There has been an erosion of CON programs that oversee NICUs. CON programs are associated with more efficient delivery of neonatal care.

Trends during 1993-2004 in the availability and use of revascularization after acute myocardial infarction in markets affected by certificate of need regulations

This study examines trends in the diffusion of coronary artery bypass graft (CABG) and percutaneous coronary intervention (PCI) during 1993-2004 for patients with acute myocardial infarction in markets with and without Certificate of Need (CON) regulations for open-heart surgery or cardiac catheterization and in markets that repealed CON for either of these procedures. In contrast to prior studies, this study accounts for regional hospital markets that cross state boundaries-often with different CON activities in each state. The overall use of CABG increased modestly throughout the 1990s and subsequently decreased, corresponding to a dramatic increase in PCI. There was a greater rise in the number of CABG programs in markets with significant reduction in CON regulations during 1993-2004 compared with other markets, but CON reduction was not related to growth of PCI programs. Reimbursement, ease of use, clinician endorsement, and technological advances in PCI may outweigh effects of CON.