Imagine needing your competitors’ blessing to open a business. For healthcare providers in Tennessee, that is reality under certificate-of-need (CON) laws. These laws require healthcare providers to receive a government “permission slip” to open a new healthcare facility or offer a new service. Before offering any new service, providers must show there is a “need” for healthcare services. Meanwhile, competitors could step in and object.
Tennessee’s CON system cost is steep. Research shows that without CON, Tennessee would have 63 more hospitals, with 25 of them in rural areas. CON laws have such a negative effect on healthcare that the federal government repealed its mandate on the states in 1986. Tennessee, like dozens of states, still has them in some form.
The state has spent the last decade whittling away at CON, and earlier this year, made its largest repeal yet. Satellite emergency departments, cardiac catheterization services, and acute care hospitals are all slated to be phased out of CON requirements. The progress is real. Tennessee has gone from requiring a hearing for a new MRI machine to exempting entire acute care hospitals in 2030. But patients today still face a healthcare system that needs a government permission slip to adapt and grow.
For many healthcare providers, the job is far from finished. Nursing homes, home health agencies, hospice care, outpatient diagnostic centers, rehab facilities, organ transplant services, and nonresidential opioid treatment centers remain under CON laws, with no end in sight. Even relocating services or moving beds requires state approval. For aging and rural populations, these services can matter the most. Care in one’s home, at the end of one’s life, or treatment for an addiction have yet to be touched by lawmakers, and still require providers to obtain a coveted government permission slip.