CON Quarterly: Happy New Year
Welcome to the first CON Quarterly in 2026—
Happy New Year, Readers.
As a reminder, in markets where the government requires a certificate of need or CON, those who wish to offer a new service or expand an existing service must first prove to a regulator that the service is needed. As the name suggests, the regulator’s primary task is to determine if the service is needed, not to determine whether the provider is qualified or if his or her safety record is adequate.
CON laws can be found in a handful of industries, including rail transport, taxi service, and moving services. But their most prominent application in the U.S. is in healthcare. In about two-thirds of states, healthcare providers may not open or expand their services without first proving that the community needs the new or expanded services. This process often requires healthcare providers to overcome their competitors’ complaints that their service is not needed. As we will explore in this newsletter, CON laws tend to reduce patients’ access to low-cost, high-quality healthcare.
In today’s newsletter, we will update you on two newly published CON papers, explain how CON was considered by the federal government in awarding Rural Health Transformation Program funds, and share a few news stories.
That’s it. Please forward this newsletter to anyone you think might benefit from it.
New Papers
1. In October 2025, Jonathan H. Cantor, Jill Horwitz, Christopher M. Whaley, and Anthony Yu published an NBER working paper looking at the Relationship Between Certificate of Need Laws and Mortality. Using data from 1979 through 2004, the authors examined the effects of CON repeal on all-cause mortality, heart-disease-related mortality, and cancer-related mortality. They find that CON repeal was associated with a statistically significant decrease in cancer-related mortality in the first three years following repeal, with a less precise decrease in cancer mortality after that. CON repeal was not associated with a statistically significant change in all-cause- or heart-disease-related mortality. This is one of the most comprehensive literature syntheses published to date, and it strengthens the case that CON laws systematically shape market entry and competitive outcomes.
2. In August 2025, Jill Horowitz, Austin Nichola, Anthony Yu, Carrie H. Colla, and David M. Cutler published an article reviewing The effects of certificate of need policies on the quantity and quality of diagnostic imaging. They find that Medicare beneficiaries in CON states are less likely to receive any imaging and even less likely to receive low-value imaging than beneficiaries in states without CON laws. For example, imaging for non-specified low back pain falls by 20.70% in states with CON laws. High-value imaging remains unaffected.
Rural Health Transformation Program
You may be aware that as part of the One Big Beautiful Bill, Congress created the Rural Health Transformation Program to administer $50 billion in funds for rural healthcare programs over the next five years.
Although Congress appropriated $50 billion to this fund, states were not guaranteed money. Each state still had to submit an application for funds. CMS came up with a scoring guideline for application and gave a slight preference to states with no CON laws or limited CON laws.
The following states committed to reforming CON laws or repealing them altogether in their applications: AK, DE, IA, NE, RI, TN. Tennessee’s application commits to fully repealing the state’s CON laws, while most states commit only to some reforms. For example, Iowa committed to reforming CON for behavioral health services, and Alaska committed to repealing CON for ancillary services. Notably, CMS retains discretion to claw back funds if applicants fail to take promised policy actions.
CON in the News
1. Last month, Carolina Public Press reported that a three-judge panel has upheld the constitutionality of North Carolina’s CON laws. In a challenge filed by The Institute for Justice, optometrist Jay Singleton argued that the CON law violates provisions of the state constitution. The panel disagreed, ruling the CON law “serves the public interest, pursuing the legitimate purpose of protecting public health and affordable health care through reasonable means.” Dr. Singleton will appeal.
2. Our second story also comes from North Carolina. KFF Health News chronicled a battle over a CON for a new hospital in western North Carolina. For three years, Mission Hospital, owned by HCA, has used the CON process to keep Advent Health from opening a hospital to serve the 22,000 residents in rural Weaverville. This is an important example of how existing providers can weaponize the CON process.
3. Miranda Spindt published a new policy focus document summarizing the policy arguments supporting CON reform and repeal.
4. A recent report by Pacific Legal Foundation documents how CON regulations are associated with fewer healthcare facilities, constrained service capacity (including hospitals and psychiatric services), and higher costs for patients. The report highlights how these restrictions limit provider entry and expansion, reducing system flexibility and access—particularly during periods of heightened demand.
That’s all for now. Thanks for reading. Please let us know what you think about these updates and what you’d like to see in our next installment.
Best,
Jaimie and Sriparna
Jaimie Cavanaugh is state policy counsel at Pacific Legal Foundation, where she works with legislators across the country to end CON laws. She is a CON policy expert and regularly testifies at state capitols in support of bills to repeal or reform CON laws. She also helps behind the scenes by drafting bill language, gathering data for legislators, and building coalitions on the ground. Previously, she represented Nepali immigrants who challenged Kentucky’s CON laws in court after they were prevented from opening a needed home health agency. in court after they were prevented from opening a needed home health agency.
Sriparna Ghosh is an associate professor of economics at the University of Cincinnati (UC) Blue Ash College and also a research affiliate at the Knee Center for Studies of Occupational Licensing Regulation (CSOR). She received her PhD in economics from West Virginia University in 2017. As a trained applied microeconomist, she focuses on health, labor, and entrepreneurship economics in her research. More specifically, she focuses on understanding access and barriers within labor markets and health outcomes of underserved communities. In her current research project(s), she is investigating mechanism(s) of occupational licensing and certificate of need policies in understanding the relationship between public policy and health outcomes.
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