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The Causal Effect of Repealing Certificate-of-Need Laws for Ambulatory Surgical Centers: Does Access to Medical Services Increase?

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  • Thomas Stratmann
  • Markus Bjoerkheim
  • Christopher Koopman

Abstract

In many states, certificate-of-need (CON) laws prevent ambulatory surgical centers (ASCs) from entering the market or expanding their services. This paper estimates the causal effects of state ASC-CON law repeal on the accessibility of medical services statewide, as well as for rural areas. Our findings show that CON law repeals increase ASCs per capita by 44-47% statewide and 92-112% in rural areas. Repealing ASC-CON laws causes a continuous increase in ASCs per capita, an effect which levels off ten years after repeal. Contrary to the 'cream-skimming' hypothesis, we find no evidence that CON repeal is associated with hospital closures in rural areas. Rather, some regression models show that repeal is associated with fewer medical service reductions.

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  • Thomas Stratmann & Markus Bjoerkheim & Christopher Koopman, 2024. "The Causal Effect of Repealing Certificate-of-Need Laws for Ambulatory Surgical Centers: Does Access to Medical Services Increase?," Papers 2405.08160, arXiv.org.
    • Handle: RePEc:arx:papers:2405.08160
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    References listed on IDEAS

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    1. Thomas Stratmann, 2022. "The Effects of Certificate-of-Need Laws on the Quality of Hospital Medical Services," JRFM, MDPI, vol. 15(6), pages 1-29, June.
    2. Stratmann, Thomas, 2020. "Examining Certificate-of-Need Laws in the Context of the Rural Health Crisis," Working Papers 10561, George Mason University, Mercatus Center.
    3. Alexander Tabarrok, 2013. "Private Education In India: A Novel Test Of Cream Skimming," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 1-12, January.
    4. Munnich, Elizabeth L. & Parente, Stephen T., 2018. "Returns to specialization: Evidence from the outpatient surgery market," Journal of Health Economics, Elsevier, vol. 57(C), pages 147-167.
    5. Simpson, J.B., 1985. "State certificate-of-need programs: The current status," American Journal of Public Health, American Public Health Association, vol. 75(10), pages 1225-1229.
    6. Kathleen Carey & James F. Burgess & Gary J. Young, 2011. "Hospital competition and financial performance: the effects of ambulatory surgery centers," Health Economics, John Wiley & Sons, Ltd., vol. 20(5), pages 571-581, May.
    7. Ashesh Rambachan & Jonathan Roth, 2023. "A More Credible Approach to Parallel Trends," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(5), pages 2555-2591.
    8. Robert L. Ohsfeldt & Pengxiang Li, 2018. "State entry regulation and home health agency quality ratings," Journal of Regulatory Economics, Springer, vol. 53(1), pages 1-19, February.
    9. Yang, Ou & Chan, Marc K. & Cheng, Terence C. & Yong, Jongsay, 2020. "Cream skimming: Theory and evidence from hospital transfers and capacity utilization," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 68-87.
    10. Michael Robert Plotzke & Charles Courtemanche, 2011. "Does procedure profitability impact whether an outpatient surgery is performed at an ambulatory surgery center or hospital?," Health Economics, John Wiley & Sons, Ltd., vol. 20(7), pages 817-830, July.
    11. 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).
    12. Bailey, James, 2016. "Can Health Spending Be Reined In through Supply Constraints? An Evaluation of Certificate-of-Need Laws," Working Papers 05192, George Mason University, Mercatus Center.
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