Do Certificate of Need Programs Affect COPD Mortality Rates?
Abstract
Certificate of Need (CON) programs started being passed in states in the 1970’s with the intent of lowering healthcare costs for patients. Certificate of Need allows state legislatures to determine if a hospital is needed within their state, which can limit competition. In this paper, I research if CON programs impact survival rates of Chronic Obstructive Pulmonary Disorder (COPD) patients, one of the leading causes of death in the United States. I do this by using state level mortality rates from the CDC’s data from 1968-2016 on states with and without CON, and a difference-in-difference regression technique. The driving idea behind this paper is the argument that competitive markets tend to protect consumers, therefore, if CON programs limit competition substantially, I should observe a fall in the quality of healthcare as measured by COPD survival rates. If COPD mortality rates increase due to CON, it calls into question whether lower healthcare costs are worth a decreased quality of care. Very little research has been done in this area and has shown mixed results as to what impact Certificate of Need has on quality of healthcare, but the research that has been done shows very mixed results. I find that Certificate of Need Programs have no impact on COPD mortality rates. However, a more micro-analysis may have different finding since economic theory has multiple arguments as to how this legislation can affect quality of care.
Do Certificate of Need Programs Affect COPD Mortality Rates?
Certificate of Need (CON) programs started being passed in states in the 1970’s with the intent of lowering healthcare costs for patients. Certificate of Need allows state legislatures to determine if a hospital is needed within their state, which can limit competition. In this paper, I research if CON programs impact survival rates of Chronic Obstructive Pulmonary Disorder (COPD) patients, one of the leading causes of death in the United States. I do this by using state level mortality rates from the CDC’s data from 1968-2016 on states with and without CON, and a difference-in-difference regression technique. The driving idea behind this paper is the argument that competitive markets tend to protect consumers, therefore, if CON programs limit competition substantially, I should observe a fall in the quality of healthcare as measured by COPD survival rates. If COPD mortality rates increase due to CON, it calls into question whether lower healthcare costs are worth a decreased quality of care. Very little research has been done in this area and has shown mixed results as to what impact Certificate of Need has on quality of healthcare, but the research that has been done shows very mixed results. I find that Certificate of Need Programs have no impact on COPD mortality rates. However, a more micro-analysis may have different finding since economic theory has multiple arguments as to how this legislation can affect quality of care.