New report exposes the harm of Certificate of Need laws  

Washington, D.C.; August 27, 2025: Pacific Legal Foundation has released a new research in brief, “Certificate of Need Reform: Answering the Fears,” showing how outdated and anti-competitive “Certificate of Need” (CON) laws harm patients, stifle innovation, and drive up healthcare costs.

Originally sold as a way to control costs and expand access, CON laws require healthcare providers to get government permission before opening or expanding facilities. In most states, existing providers can block these applications—protecting their market share at the expense of patient choice.

The report reveals that while some states like South Carolina, Tennessee, Wyoming, and the District of Columbia have recently reformed or repealed CON laws, others—including Maine and West Virginia—still enforce them across a dozen or more categories of care.

Key findings:

• States with CON laws have fewer hospitals, psychiatric care facilities, and medical imaging devices—and were 27% more likely to run out of hospital beds during COVID-19.
  • Industries that rely on CON laws include hospitals, nursing homes, psychiatric services, and imaging centers. For example, 34 states require a CON for nursing home beds, 31 for psychiatric services, and 20 for MRI machines.
• Patients pay more and get less: Studies find CON laws increase spending per service and lower the quality of care.
  • Rural communities suffer most: States with CON laws have 30% fewer rural hospitals and 13% fewer rural surgical centers.

“CON laws are a permission slip for monopolies to keep out competition,” said Jaimie Cavanaugh, PLF state policy counsel and coauthor of the report. “Patients in these states pay more, wait longer, and have fewer choices—all to protect special interests.”

Read the full report, “Certificate of Need Reform: Answering the Fears”