I filed a bill this year to do away with the CON process in Tennessee. The history of CON is very interesting. The process was never meant to prevent private investment dollars from investing in health care facilities but that is exactly what the CON process does.
A Brief History of CON
CON evolved out of the Depression and WWII; at a time when private dollars to build healthcare facilities were more than scarce. In order to expand the local hospital or to buy a much needed piece of equipment, communities formed committees that worked to raise charitable dollars, and to decide how to spend those dollars.
After the war, the federal government began to aid the local groups by offering grants as assistance. By the 1960's, the American Hospital Association successfully convinced the New York State legislature to pass a state law making the process a state function. Only their process not only "planned" how to spend charitable dollars, and government grant dollars, but it additionally had the insidious ability to restrict private investment dollars. This meant that in order to build a new facility private investors now had to seek permission from the state in the form of a certificate of need, a.k.a. CON.
Ten years later, AHA successfully passed CON legislation at the federal level. However, the federal law was repealed in only three years as analysts quickly realized the negative effects on competition, innovation and price.
Unfortunately, the AHA and other lobbyists were able to convince most states to keep their CON laws. Today, 32 states require certificates of need for varying items.
CON is protectionism at its worst. A CON costs an incredible amount of money, time and hassle to get.
Read More About CONA great little book by the John Locke Foundation, Certificate-of-Need, It's Time For Repeal, explains the process quite well. Here is a review.