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Cross Border Effects of State Health Technology Regulation

Author

Listed:
  • Jill R. Horwitz

    (School of Law, University of California, Los Angeles, and the National Bureau of Economic Research)

  • Daniel Polsky

    (Perelman School of Medicine and Wharton School, University of Pennsylvania and the Leonard Davis Institute of Health Economics)

Abstract

Certificate of Need (CON) laws, state laws requiring providers to obtain licenses before adopting health-care technology, have been controversial. The effect of CON on technology supply has not been well established. In part this is because analyses have focused on state-level supply effects, which may reflect either the consequence of CON regulation on supply or the cause for its adoption or retention. Instead, we focus on the cross border effects of CON. We compare the number and location of magnetic resonance imaging providers in counties that border states with a different regulatory regime to (1) counties in the interior of states, (2) counties on state borders with the same regulatory regime on both sides, and (3) counties on borders with different regulatory regimes, but with a large river on the border. We find there are 6.4 fewer MRIs per million people in regulated counties that border counties in unregulated states than in unregulated counties that border regulated counties. This statistically significant finding that regulatory spillover can be sizable should be accounted for in future research on state-based health technology regulation. In addition, it suggests state experiences may not accurately predict the effects of CON if it were implemented nationally. © 2015 American Society of Health Economists and Massachusetts Institute of Technology

Suggested Citation

  • Jill R. Horwitz & Daniel Polsky, 2015. "Cross Border Effects of State Health Technology Regulation," American Journal of Health Economics, University of Chicago Press, vol. 1(1), pages 101-123, Winter.
    • Handle: RePEc:ucp:amjhec:v:1:y:2015:i:1:p:101-123
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    File URL: https://www.journals.uchicago.edu/doi/pdf/10.1162/AJHE_a_00005
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    Citations

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    Cited by:

    1. Bingxiao Wu & Jeah Jung & Hyunjee Kim & Daniel Polsky, 2019. "Entry regulation and the effect of public reporting: Evidence from Home Health Compare," Health Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 492-516, April.
    2. Jill Horwitz & Austin Nichols & Carrie H. Colla & David M. Cutler, 2024. "Technology Regulation Reconsidered: The Effects of Certificate of Need Policies on the Quantity and Quality of Diagnostic Imaging," NBER Working Papers 32143, National Bureau of Economic Research, Inc.
    3. Chiu, Kevin, 2021. "The impact of certificate of need laws on heart attack mortality: Evidence from county borders," Journal of Health Economics, Elsevier, vol. 79(C).

    More about this item

    Keywords

    CON laws; MRI; regulating;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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