North Carolina and 34 other states have what are called Certificate of Need (CON) Laws. The purpose of CON Laws is to restrict entry into the market for medical facilities and equipment. If you are a health care entrepreneur and you want to do anything from adding a new wing or extra beds to an existing hospital, to opening an office that offers MRI, X-ray or other services, you need a "Certificate of Need" from the state. The function of CON is summarized by the state as follows:
The North Carolina Certificate of Need Law prohibits healthcare providers from acquiring, replacing, or adding to their facilities and equipment ... without the prior approval of the Department of Health and Human Services...The law...limits unnecessary health services and facilities based on geographic, demographic and economic considerations... All new hospitals, psychiatric facilities, chemical dependency treatment facilities, nursing home facilities, adult care homes, kidney disease treatment centers, intermediate care facilities for mentally retarded, rehabilitation facilities, home health agencies, hospices, diagnostic centers, oncology treatment centers, and ambulatory surgical facilities must first obtain a CON before initiating development. In addition, a CON is required before any upgrading or expansion of existing health service facilities or services.
The stated purpose of the law is to eliminate duplication of services in an attempt to reduce health care costs. In reality it protects existing facilities from competition by creating a legal, bureaucratic, and expensive maze that must be navigated by any person or company that wants to provide the kinds of medical services mentioned above. This maze usually takes years to negotiate with the outcome being very uncertain.
Analyst: Dr. Roy Cordato
Vice President for Research and Resident Scholar
919-828-3876 • firstname.lastname@example.org