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Cross Border Effects of State Health Technology Regulation

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  • Jill R. Horwitz
  • Daniel Polsky

Abstract

Certificate of Need Laws (CON), state laws requiring providers to obtain licenses before adopting healthcare 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.

Suggested Citation

  • Jill R. Horwitz & Daniel Polsky, 2014. "Cross Border Effects of State Health Technology Regulation," NBER Working Papers 19801, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19801
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    More about this item

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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