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

TL;DR

This study assesses how repealing certificate-of-need laws for ambulatory surgical centers affects access to medical services, finding significant increases in ASCs and no adverse effects on hospital closures, especially in rural areas.

Contribution

It provides causal evidence on the impact of CON law repeal on ASC accessibility and rural healthcare, filling a gap in policy impact analysis.

Findings

ASC numbers increased by 44-47% statewide after repeal

Rural areas saw a 92-112% increase in ASCs

No evidence of hospital closures due to CON repeal

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.