Certificate-of-need (CON) laws are among the various experiments policymakers have conducted in an effort to curb the growth of healthcare spending. Currently in place in 35 states, these laws require new or expanding healthcare providers to prove to their state government that they are economically necessary and that they effectively limit the supply of healthcare services. 

In a new study for the Mercatus Center at George Mason University, “Can Health Spending Be Reined In through Supply Constraints? An Evaluation of Certificate-of-Need Laws,” economist James Bailey finds that CON laws may actually increase healthcare spending, while states that have repealed these laws show a decrease in spending.