The effect of certificate-of-need laws on hospital beds and healthcare expenditures: an empirical analysis.
OBJECTIVE
To estimate the effect of certificate-of-need legislation on hospital bed supply and healthcare expenditures.


METHODS
This study uses state data on several variables, including healthcare expenditures, hospital bed supply, and the existence of a certificate-of-need program, from 4 periods (1985, 1990, 1995, and 2000).


METHODS
We estimate 2 multivariate regression equations. In the first equation, hospital bed supply is the dependent variable, and certificate of need is included as an independent variable. In the second equation, healthcare expenditures is the dependent variable, and hospital bed supply and certificate of need are included as independent variables.


RESULTS
Certificate-of-need laws have reduced the number of hospital beds by about 10% and have reduced healthcare expenditures by almost 2%. Certificate-of-need programs did not have a direct effect on healthcare expenditures.


CONCLUSIONS
Certificate-of-need programs have limited the growth in the supply of hospital beds, and this has led to a slight reduction in the growth of healthcare expenditures.
Center for Delivery, Organization, and Markets, Agency for Healthcare Research and Quality, Rockville, MD 20850, USA. fred.hellinger@ahrq.hhs.gov
Fred J
FJ
Hellinger
D001513:Beds / Q000600:supply & distribution*; D002567:Certificate of Need / Q000331:legislation & jurisprudence*; D036262:Empirical Research; D005102:Health Expenditures; D006761:Hospitals; D006801:Humans; D008145:Louisiana; D015999:Multivariate Analysis