Certificate of Need: When Doctors Need Permission to Treat

If you're a physician in 35 US states or Washington D.C., you already know this absurdity. Before you open a new facility, add an MRI, or expand a surgical suite, you must prove to the state that your services are needed  and your competitors get a seat at the hearing to argue they aren't.

The numbers

First enacted in New York in 1964, made a federal mandate in 1974, then repealed federally in 1986 Congress concluded the laws had "failed to control healthcare costs and were insensitive to community needs." Yet 35 states still enforce them. GitHub

The data is unambiguous. CON laws correlate with 50% fewer hospitals per 100,000 people and 12% fewer beds at the typical hospital. A large body of research finds they have limited access, degraded quality, and increased cost the exact opposite of their stated purpose. ISCO-08ILOSTAT

What it looks like in practice

You know the friction better than anyone. One Virginia physician spent five years and $175,000 in fees just to get approval for a second MRI machine then declined to expand further because the cost and uncertainty weren't worth it. Imaging delayed. Specialists blocked. Rural patients driving hours because a committee decided their town had "enough" care. International Labour Organization

Even hospital executives have turned against it. The CEO of HCA Healthcare testified that these laws "now do the opposite" of cost control "limiting competition, constraining supply and increasing prices." International Labour Organization

Why it fails

Sold as patient protection, it functions as incumbent protection a legal moat that lets established players vote on whether you're allowed to serve a patient. The gate was never built for the patient. It was built for whoever already holds the keys.

You went into medicine to treat people. Not to file a permission slip and wait five years for a machine. Care should be direct between the clinician who can help and the patient who needs it. No committee in the middle. That's the system we're building.

It's Not Just America: How the World Rations Care by Permission

The US has the most cynical version competitors literally show up to block you. But the idea that a committee decides how much care a region is "allowed" is global. Different names, same logic.

United States — Certificate of Need (CON) Since 1964. Still active in 35 states + DC. Incumbents object at the hearing to keep rivals out.

Germany — Krankenhausplanung & Bedarfsplanung Since 1972. States plan hospital beds; outpatient doctors are capped per region if a district is "fully supplied," new physicians are blocked.

Netherlands — Wet Ziekenhuisvoorzieningen Since 1971. Controlled hospital construction and capacity; largely liberalized after 2008.

Switzerland — Cantonal hospital lists rooted in the 1990s health insurance law (KVG, 1994). Spitalliste Each canton decides which hospitals make the list. Off the list, you can't bill insurance.

Austria — Strukturplan Gesundheit (ÖSG) Since 2006 National plan dictating where beds and big equipment like MRI and CT may exist.

France — Autorisations (ARS / PRS) since 1970 Regional health agencies must authorize new facilities and heavy equipment based on assessed "need."

Japan — Medical Care Plan Since 1985. Prefectures set regional bed quotas. Over the quota? New beds refused.

Canada, England, Netherlands, South Korea, Australia No single famous law, but all run regional bed-planning and equipment-approval systems that limit supply by permission.

The pattern

Whether it's a competitor at a hearing or a planner at a desk, the message to a provider is the same: prove your care is allowed before you're permitted to give it.

Care should flow from the person who can help to the person who needs it. Not through a committee deciding there's already "enough."

The tools to route around this finally exist. Direct booking. Direct payment. No gatekeeper deciding who's allowed to heal whom. The permission era is ending one connection at a time.

ReasonTV  Is this the dumbest health care law? https://youtu.be/l78tLUk_d0k?si=rP8daCmfDTGPLWT-