Evaluating Certificate of Public Need Effects on Health Care Spending

Virginia’s Certificate of Public Need (COPN) program requires owners and sponsors of proposed health care facility projects to secure permission from the state health commissioner. The COPN program covers higher cost services including general acute care, perinatal, diagnostic imaging, cardiac, general surgical, organ transplantation, medical rehabilitation, lithotripsy, psychiatric/substance abuse, mental retardation, miscellaneous capital expenditures (hospital bed expansions), and nursing facility services. This model is designed to contain health care costs while ensuring financial viability and access to health care for all Virginians at a reasonable cost. Opponents of COPN claim the program increases cost to consumers because it reduces competition in the marketplace. So an obvious question is ‘Has COPN made Virginia a high cost state for health care?’ VHHA staff compared health spending per capita for the 15 states that have eliminated CON programs to Virginia’s health spending per capita. Those states are Arizona, California, Colorado, Idaho, Indiana, Kansas, Minnesota, North Dakota, New Mexico, Pennsylvania, South Dakota, Texas, Utah, Wisconsin, and Wyoming. Virginia’s health care spending per capita is the same or less than 8 of the non-COPN states.  When hospital costs per patient day are compared among all states, Virginia’s costs fall among the bottom third. The data show the COPN program has not made Virginia a high health spending per capita state. (9/25/2015)