No one should be surprised that opening a new hospital isn’t easy, but many would be surprised to learn just how difficult expanding healthcare capacity can be. Thirty-four states regulate healthcare services through Certificate of Need (CON) laws. Under CON laws, a provider cannot simply open a new facility or expand an existing one. Instead, the provider must first convince the state that the community needs the new service or capacity, often over the veto of their competitors.
There is a large literature on CON laws, but it has been difficult to assemble
consistent historical information on which services are regulated and when
those requirements were adopted or repealed. As a result, much of the existing
research focuses on relatively short periods or individual services. A new
dataset housed by the Knee Regulatory Research Center addresses this gap by
documenting CON requirements for 31 services in all 50 states from 1990 through
2025 (with select state data going back to 1964!).
CON laws create a state process for determining whether additional healthcare capacity is needed. A provider seeking to open or expand a regulated service must apply for approval and demonstrate that an unmet need exists. The details vary considerably across states and services: one state might require a CON for one service but not another, while another state might regulate both.
CON laws were created to ensure healthcare providers did not build excess capacity and concentrate in urban areas, at a time when changes to healthcare spending eroded the budget constraint for both patients and hospitals. CON laws were originally adopted with several goals in mind:
· limiting unnecessary or duplicative healthcare capacity and spending,
· encouraging quality by concentrating specialized services among higher-volume providers,
· maintaining the viability of smaller and rural providers.
The federal government encouraged states to adopt CON programs beginning in the 1970s, but the federal requirement was repealed in 1986, leaving states to decide whether to maintain their programs. Since 1986, 16 states have repealed their CON laws entirely, while many more have removed services from their CON programs.
Much of the existing research finds that CON laws reduce healthcare capacity. These supply restrictions can have downstream effects on healthcare markets. For example, research has generally found higher spending on services subject to CON requirements, contrary to the cost-containment rationale for the programs. Research on health outcomes has generally found either no improvement or worse outcomes associated with CON requirements.
However, much of this research was based on a limited time periods and most were unable to include many reforms in their analysis. Researchers have lacked a consistent record of long-term reforms for individual services. The services regulated by CON laws range from facilities, like hospitals or ambulatory surgical centers, to equipment, like MRIs and ultrasound machines. Because not all states include the same services in CON laws, having service-level requirements is essential for researchers.
To make these questions easier to study empirically, we compiled the CON Panel Database, a new historical panel of CON requirements for 31 services across all 50 states, beginning in 1990. We used historical versions of state statues and administrative code to identify whether each state had an active CON requirement for each service. We then constructed a year by state panel with an indicator for each of the 31 services, as well as the total number of services covered by a state. We additionally have tracked the data for several states back to their initial CON laws, such as New York in 1964.
Number Certificate of Need Requirements Per State, 2025
Source: Bailey, James B. and Ghosh, Sriparna and Leventhal, Justin and Norris, Conor, Certificate of Need: A New Comprehensive Panel (September 21, 2026). Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7498741
The data are structured for direct use in empirical research. Researchers can use the database to study the effects of adopting or repealing CON requirements for individual services, and the panel allows estimates of the short-run and long-run effects of these programs. Researchers can compare similar services that are regulated differently.
For example, suppose a researcher wants to know whether CON requirements reduce the availability of a particular hospital service. They could identify states that repealed the requirement, examine changes in service availability before and after repeal, and compare those changes with states that retained the requirement.
The database does not capture every feature of state CON programs. For example, some states have specific exemptions or carve-outs, including provisions for rural areas or equipment below a certain dollar threshold. The current database also does not include details about application procedures, fees, wait times, and competitor’s veto. Future editions of this database, and hopefully related work by other researchers, will feature more of this information to help provide a complete picture of CON law requirements and how CON programs operate.
For decades, researchers have tried to understand the effects of CON laws, but the absence of detailed historical data has made it difficult to consistently identify when and where particular CON restrictions were in place. The CON Panel Database provides a new resource for studying these questions by documenting CON requirements for 31 healthcare services across states and over time. We hope the database will help researchers better understand one of the most consequential forms of healthcare regulation in the United States.
Explore the CON Panel Database here: https://knee.wvu.edu/data/certificate-of-need-panel-database
Working paper here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7498741
Conor Norris is the Director of Labor Research at the Knee Regulatory Research Center and an Assistant Professor in General Business at West Virginia University.