THE CERTIFICATE OF NEED (CON); A WEB OF DECEIT

“Will you walk into my parlor?” said the spider to the fly; “’Tis the prettiest little parlor that ever you did spy.”

The subtitle is from the poem by Mary Howitt (1799-1888)

This graphic is from a publication by the National Conference of State Legislatures and it can be found at ncsl.org

This map shows that there is some form of Certificate of Need legislation in 35 states.
If you live in one of the states that has CON legislation you can read about it by going to the NCSL website.


In the last edition of Larry’s Letters I wrote about a national law firm, FosterBrown&Todd, headquartered in Louisville, KY. FosterBrown&Todd has a history of funneling money to state politicians who are in a position to see that the CON never goes away for the sole purpose of helping the large healthcare organizations in the state to maintain their monopoly. As an example I focused on St. Elizabeth Healthcare which operates in four counties in Northern Kentucky and one county, Dearborn, in Indiana.

Of the 35 CON states shown on the map above, FrostBrown&Todd have offices in six: Indiana, Kentucky, Ohio, Tennessee, West Virginia, and Washington, D.C.

This is how the NCSL explains the CON:

“Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities. In a state with a CON program, a health planning agency or other entity must approve the creation of new health care facilities or the expansion of an existing facility’s services in a specified area. CON programs primarily aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need.”( emphasis added)

This is, of course, a noble pursuit but in a prior edition of Larry’s Letters I showed how the CON was used by St. Elizabeth Healthcare to prevent another hospital system from building a same day surgery center on its turf and then that very same CON was used 18 months later to obtain clearance to build its own same day surgery center.

But there is a larger problem. Rather than ensuring the “equitable distribution” of health care delivery, the CON has failed to protect rural hospitals which are closing at an alarming rate all across the nation in both those states that have CON requirements and those that do not. The following graphic was taken from a 2024 report (Unrelenting pressure pushes rural safety net into uncharted territory) by Chartis a hospital consulting firm. This graphic clearly demonstrates that CON legislation has little or no effect on ensuring the provision of health care in rural communities.

In fact, if you match the states with the highest rates of rural hospital closings with those that have CON legislation in place with few exceptions the CON states have the highest rates of rural hospital closures.

Certificates of need should have provided the opposite results but clearly they have not. A simple explanation is that the mega healthcare systems are able to drive the competition out of business and replace them with their own operations or force patients to travel for more than 30 minutes to obtain hospital based care.

The Advisory Board is another healthcare industry consulting firm. In a 2023 report the Advisory Board asked: Why are 800 rural hospitals at the risk of closure? They present a “complex” analysis of the various economic pressures that are being placed on rural hospitals but in the final analysis they conclude:

“Rural providers aren't providing "rural health care"—they're providing health care in a rural setting. While niche policies can help in pockets, rural providers need federal policymakers to consider rural needs in overall health policy to meet the magnitude of the crisis.”

In other words, the Advisory Board has concluded that the savior of the rural hospital is the CON that allows mega-healthcare systems to “partner” with the failing rural hospital and adjust services “appropriately” while taking federal dollars to meet the financial needs of the failing rural hospitals which will then be under both federal and mega-healthcare system control; a clear path to socialized medicine supported by federal and state politicians who receive campaign contributions from both the American Hospital Association, state hospital associations, the mega-healthcare systems themselves, and a cadre of law firms much like FosterBrown&Todd who facilitate it all.


There is a simple solution and all it takes politicians who are the “good Shepards” (John 10:10-12) to do the right thing. Eliminate the CON and you eliminate special interest money being paid to our public officials.


Union, Kentucky

15 June 2024