 Barriers to entry in the healthcare markets: Winners and Losers from certificate-of-need lawsMatthew C. Baker and Thomas Stratmann Socio-Economic Planning Sciences, 2021, vol. 77, issue C Abstract: In states with Certificate of Need (CON) laws, medical services providers must file an application and demonstrate community need before being permitted to start or expand a service. We examine CON laws for magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scanners to test the hypothesis that the approval process favors established incumbent hospitals over new hospital entrants and nonhospital providers. Using Medicare claims data in 2013, we find that states with CON laws have 20 to 33% fewer providers, depending on the type of scanners to which the laws apply. As a result, residents of CON law states are 3.4–5.3 percentage points more likely to travel outside their home county to obtain imaging services than residents of non-CON states. In addition, there is a notable shift in the type of provider: CON laws are associated with 27–53% fewer scans by nonhospital providers per beneficiary, 23 to 70% fewer by new hospitals, but 6 to 21% more scans in older hospitals. Keywords: Barriers to entry; Certificate-of-need laws; Medical imaging services; Health care; Healthcare; Medicare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:77:y:2021:i:c:s0038012120308442 DOI: 10.1016/j.seps.2020.101007 Access Statistics for this article Socio-Economic Planning Sciences is currently edited by Barnett R. Parker More articles in Socio-Economic Planning Sciences from Elsevier |
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