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Understanding Certificate of Need (CON)

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Determine two advantages and two disadvantages from the healthcare organization's perspective for requiring a Certificate of Need (CON)? Identify 3 states that require a CON be submitted to state and regional review agencies for any new or upgraded healthcare facilities.

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In 1974 the Federal Government enacted the "National Health Planning and Resources Development Act" as a means to control health care spending. This law required the states to established local health system agencies to approve applications for Federal dollars "on the basis of a realistic assessment of the need and the capabilities within that area" (Endicott, 1975, ¶2). As part of the program, states enacted laws establishing "certificate of needs" known as CON which the local agencies would approved according to the local market needs to reduce overall health and medical costs. In other words, the CON would control if the medical facilities or new proposed expansion and services were necessary in the community. This meant that each state could be as flexible or strict as they choose. This also meant that each local agency, established to regulate the CON, could easily be influenced by politics or economical reasons and not always ruled according to market needs.

Even though the funding and mandate were repealed in 1984, thirty-six states maintain some kind of CON program and 14 states kept some type of mechanism to regulate cost and duplication of services (National Conferences of Legislatures (NCOL), ...

Solution Summary

The solution includes a brief history of the Certificate of Need (CON), states that enforced them, and advantages and disadvantages of having them on place from a healthcare organization perspective.