Repeal of CON laws for ASCs expands healthcare access, number of facilities in rural areas

Editor's Note

This fall 2024 study published by the CATO Institute found that repealing Certificate-of-Need (CON) laws for ambulatory surgical centers (ASCs) would significantly increase the number of ASCs, improving patient access to affordable and high-quality care. By examining six states that repealed ASC-specific CON laws between 1991 and 2019, researchers observed a 44–47% increase in ASCs statewide, with a notable 92–112% rise in rural areas, where access to surgical centers is often limited.

The findings suggest that lifting ASC-specific CON laws can improve access to surgical care, particularly in underserved rural communities, without harming hospitals' financial viability. CON laws, enforced in 35 states, require regulatory approval before opening or expanding healthcare facilities, limiting competition and patient options. The study also disproved concerns that repealing CON laws would lead to hospital closures or reduced services. Instead, the presence of ASCs allowed hospitals to focus on more complex procedures while ASCs handled less invasive surgeries. This complementary relationship should only expand healthcare access and preserve rural hospitals' services, the authors noted.

CON laws were originally introduced to control healthcare costs and maintain cross-subsidization of essential services, particularly in rural areas. However, the study shows these laws restrict competition, leading to higher healthcare costs and reduced service availability. For example, Medicare reimburses hospital outpatient departments more than double what it reimburses ASCs for the same procedures. Repealing CON laws has allowed ASCs to offer lower-cost surgeries, shifting care away from the more expensive hospital setting.