title: State deregulation and Medicare costs for acute cardiac care.
abstract: Past literature suggests that Certificate of Need (CON) regulations for cardiac care were ineffective in improving quality, but less is known about the effect of CON on patient costs. We analyzed Medicare data for 1991-2002 to test whether states that dropped CON experienced changes in costs or reimbursements for coronary artery bypass graft (CABG) surgery or percutaneous coronary interventions. We found that states that dropped CON experienced lower costs per patient for CABG but not for percutaneous coronary intervention. Average Medicare reimbursement was lower for both procedures in states that dropped CON. The cost savings from removing CON regulations slightly exceed the total fixed costs of new CABG facilities that entered after deregulation. Assuming continued cost savings past 2002, the savings from deregulating CABG surgery outweigh the fixed costs of new entry. Thus, CON regulations for CABG may not be justified in terms of either improving quality or controlling cost growth.
authors.affiliation: Baker Institute for Public Policy, Rice University, Houston, TX 77005, USA. vho@rice.edu
authors.forename: Vivian
authors.initials: V
authors.lastname: Ho
authors.forename: Meei-Hsiang
authors.initials: MH
authors.lastname: Ku-Goto
mesh_terms: D000368:Aged; D002567:Certificate of Need / Q000191:economics / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D001026:Coronary Artery Bypass / Q000191:economics*; D003324:Coronary Artery Disease / Q000191:economics* / Q000601:surgery; D017046:Cost Savings; D003422:Critical Care / Q000191:economics; D005260:Female; D033161:Government Regulation; D017048:Health Care Costs / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D006801:Humans; D008297:Male; D006278:Medicare / Q000191:economics* / Q000458:organization & administration; D062645:Percutaneous Coronary Intervention / Q000191:economics*; D011787:Quality of Health Care; D013219:State Government; D014481:United States