What is a Certificate of Need?

In some industries, new businesses must apply for a license or “certificate” to prove that their service is “needed.” This is a long, tedious process that is unrelated to health and safety concerns.

Existing businesses that hold a certificate are invited to testify about whether they think new competition is desirable. That’s an obvious conflict of interest. And certificate holders enjoy a “competitor’s veto” power over new competition because the government often defers to their objections to new businesses.

“Competitor’s veto” laws limit the supply of services, mostly in the healthcare industry, including hospitals, birthing centers, home healthcare providers, MRI machines, nursing homes, and ambulances. These laws are also common in the transportation industry—over half of states require moving companies to obtain a Certificate of Need.

In courts and legislatures, Pacific Legal Foundation fights to liberate entrepreneurs and roll back Certificate of Need laws.


In courts and legislatures, Pacific Legal Foundation fights to liberate entrepreneurs and roll back Certificate of Need laws.

Thirty-nine states and the District of Columbia have CON laws for at least one medical service.


Competitor’s Veto: A Roadblock to New Businesses, a review of CON laws in the moving industry.

August 23, 2021 | By ANASTASIA BODEN

The Hill: Biden's economic reform ought to consider certificate of need, too

President Biden recently called on the federal government to increase competition in the U.S. economy as a way of boosting wages, increasing employment, and allowing people to move between jobs. One o…

December 31, 2021 | By PLF

The Daily Reflector: Fighting back against Farmville right thing to do

The restaurant business is hard work. Long hours, narrow profit margins, fierce competition — given the challenges, it’s not surprising that 60 percent of new restaurants fail in their first year….

February 11, 2022 | By ELIZABETH SLATTERY

The Oklahoman: Licensing boards must be accountable to Oklahomans

In Oklahoma, unelected licensing boards have the power to keep people out of their desired professions. But reform is underway to make Oklahoma licensing boards more accountable to the people and less…

February 14, 2022 | By DANIEL DEW

State legislatures should hold their occupational licensing boards accountable

Occupational licenses, which impact a wide variety of professions, require workers to obtain state-issued “permission slips” before working in their desired fields. Often, if not always, the state licensing boards with the authority to accept and deny license applications as they please are stacked with individuals representing special interest gro …

February 09, 2022 | By BRITTANY HUNTER

Free speech v. the Beer-eaucrats

What do beer and free speech have in common? As it turns out, a lot. Jim Caruso, CEO of Flying Dog Brewery in Maryland, has always had a passion for beer, economics, and free speech. It may not have ever occurred to him, though, that all three would someday become intricately intertwined and lead to …

August 19, 2020 | By NATHANIEL HAMILTON

States that suspended Certificate of Need laws saved lives

During the global pandemic, healthcare providers have expanded their ability to care for additional patients by adding beds and ventilators and expanding facilities. But laws in some states prevent providers from taking steps needed to expand care options. Now we have a clear accounting of the costs of these laws: A new working paper by …

April 30, 2020 | By ANASTASIA BODEN

COVID-19 increases calls to repeal certificate of need laws that limit state's medical capacities

Medical services are critical during the coronavirus pandemic. But many states artificially limit the number of providers by requiring businesses prove their services are “needed.” And who gets to weigh in on that decision? Not their prospective customers, but their established competitors. The Wall Street Journal published an op-ed by Mollie Willi …

April 08, 2020 | By NATHANIEL HAMILTON

Certificate of Need laws limited healthcare capacities in the years leading up to COVID-19

Temporary hospitals are popping up all over New York in anticipation of a growing number of coronavirus patients and an undersupply of hospital beds. The U.S. has just 2.8 hospital beds per 1,000 Americans⸺even fewer than Italy (3.2) and drastically lower than South Korea (12.3). But those so-called “field” hospitals, hidden beneath makeshift ten …

September 23, 2019 | By ANASTASIA BODEN

The American Dream shouldn’t require a certificate of need

The American Dream, at its core, is about the freedom to compete. That competition allows entrepreneurs to pursue creative ends, and consumers to choose for themselves which products and services meet their needs. Our newest client, Phillip Truesdell, understands well the transformative power of this entrepreneurial freedom, and the pain of its abs …

October 18, 2017 | By JEFF MCCOY

Georgia Supreme Court Upholds Anti-Competitive Law

On Monday, the Georgia Supreme Court issued its opinion in Women’s Surgical Center v. Berry, a case that challenged Georgia’s anti-competitive Certificate of Need (“CON”) laws. Certificate of Need laws, which PLF has successfully challenged in six other states, force entrepreneurs to prove that there is a “need” for additional services in a market …

February 19, 2015 | By TIMOTHY SANDEFUR

PLF declares war on Competitor's Veto laws

This morning, PLF is announcing its new nationwide campaign against “Certificate of Convenience and Necessity” laws. These are licensing requirements that apply to taxi and limo companies, moving companies, ambulances, even car dealerships and hospitals. We call these laws “Competitor’s Veto” laws because they allow e …

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