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Healthcare Acronym: CON - Certificate of Need

November 06, 2012
Group owner Richard Martine

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Healthcare Acronym: CON - Certificate of Need

By: Richard Martine   Post Date : November 06, 2012
In the United States, Certificates of Need (CON) are legal documents required in many state jurisdictions prior to expanding, acquiring, or creating a healthcare facility. Usually issued by a government regulatory agency, CONs are used to affirm that particular building plans meet the needs of the local community. Historically, CONs were first used in healthcare. President Nixon signed CONs into law in 1972, where they were first used in the construction of medical facilities in 35 states. Originally, the main CON requirement had its basis in state law. The Metcalf-McCloskey Act of 1964 passed in New York, followed by CON legislation in 18 other states by 1972. 1972 was also the year of the banner Section 1122 legislation, enacted on the federal level because individual states often resisted reform to their healthcare providers.

States had several reasons for enacting CON legislation. CONs were to address a number of important problems facing the healthcare industry at the state level. Perhaps most prominent among these concerns was the idea that constructing additional hospital patient capacity would oversaturate the healthcare provider market. It was thought that this oversaturation would in turn spur providers into overcharging for their services as well as hospitalizing patients who may not have required hospitalization simply because the hospitals were attempting to curb their costs.

CON regulations attempt to address this healthcare cost inflation before it occurs. Hospitals that are unable to meet the minimum capacity for financial stability are forced to charge higher prices for the patients that are presently occupying bed space. Larger healthcare facilities have larger fixed operational costs and hence require more patients to meet their financial obligations. Therefore, proponents of CONs advocate that limiting healthcare facility size to actual local needs is the most financially sensible plan of action. CONs themselves regulate the number of beds in medical facilities as well as lowering the total purchasing requirements for costly technical equipment.

Under an active CON, new equipment and bed space are constructed when a community demonstrates increased need. In practice, however, some CON legislation has been met with harsh criticism. Opponents of CON legislation claim that it limits the potential of new healthcare facilities and does not address the possibility of future growth.

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