The Causal Effect of Repealing Certificate-of-Need Laws for Ambulatory Surgical Centers: Does Access to Medical Services Increase?

Abstract

In many states, certificate-of-need (CON) laws prevent ambulatory surgical centers (ASCs) from entering the market or expanding their services. This paper estimates the causal effects of state ASC-CON law repeal on the accessibility of medical services statewide, as well as for rural areas. Our findings show that CON law repeals increase ASCs per capita by 44-47% statewide and 92-112% in rural areas. Repealing ASC-CON laws causes a continuous increase in ASCs per capita, an effect which levels off ten years after repeal. Contrary to the 'cream-skimming' hypothesis, we find no evidence that CON repeal is associated with hospital closures in rural areas. Rather, some regression models show that repeal is associated with fewer medical service reductions.