Investor's wiki

Certificate of Need (CON)

Certificate of Need (CON)

What Is a Certificate of Need (CON)?

A certificate of need (CON) is a legal document that is required to construct another healthcare facility. To get a CON, engineers of healthcare facilities must apply to the neighborhood legislative specialists by presenting the defense for why the community being referred to would benefit from that new development. Notwithstanding, the exact criteria used to determine whether an application is approved can vary widely between states. CONs are required in 35 U.S. states and Washington D.C.

How Certificates of Need (CONs) Work

Pundits of the CON program contend that the system represents a superfluous barrier to entry in the healthcare market, effectively protecting laid out wellbeing facilities from competition.

The earliest CON laws appeared during the 1960s, with New York embracing the first such statute in 1964. In 1974, the Federal Health Planning Resources Development Act was passed, and in this way, many CON laws came full circle. Today, most states have some form of CON law, program, or agency in place.

Customarily, advocates for the CON structure have contended that the systems assist with preventing superfluous spending on healthcare infrastructure and services, and that they can assist states with directing such infrastructure toward underserved regions.

Pundits, then again, contend that the CON structure safeguards the interests of laid out facilities. These pundits likewise contend that, by permitting political influence to conclude which facilities can be assembled, the CON system welcomes corruption, manipulation, and abuse.

Illustration of a Certificate of Need

Michaela is an entrepreneur situated in Illinois. As of late, she has become keen on making top caliber, long-term care facilities for elderly patients. To start fostering a business plan, she overviews the market to comprehend whether a specific customer areas or geographic regions might be underserved by the current suppliers.

In the wake of conducting her market study, Michaela distinguished a specific region in which the nearby medical services facilities appeared to be lacking to meet the existing and expected future demand. She consequently started drafting plans to construct another facility to serve those customers.

To her surprise, in any case, Michaela found that her new project would require authorization by the Illinois Health Facilities and Services Review Board. This is on the grounds that Illinois is one of 35 states with CON laws. On account of Illinois, the specific CON law being referred to has been in place starting around 1974 and directs the construction of an extensive variety of medical services facilities, including long-term care facilities, clinics, birthing centers, and dialysis centers.

Due to these laws, there is no guarantee that Michaela will actually want to foster her new medical care service, even assuming she and her supporters are convinced that the new project would almost certainly succeed and be of value to its customers.


  • Certificates of need (CON) are legal documents used to direct the American healthcare system.
  • While most states have certificate of need laws in place, there is considerable variation in their terms and conditions.
  • Certificate of need require new healthcare infrastructure to be approved by regional state run administrations.