States · Regulation
Hospitals in certificate of need states built about as much as hospitals elsewhere
Certificate of need laws exist to restrain hospital building. From 2011 to 2024, general hospitals in the 18 jurisdictions whose law reviews capital spending grew their floor space 18%; in the 19 states without one, 19%.
· Medicare cost reports, fiscal years 2011 and 2024; state law as recorded in Delgam's table of state programs
In most states a hospital that wants to build, add beds or start a new service above some cost has to ask the state first. The permit is called a certificate of need (CON), and the idea behind it is that hospitals left alone build more than their communities need, then charge patients for the empty space. About a dozen states have repealed their laws since the 1980s; others have narrowed them.
Delgam's table of state programs records what each law covers. In 18 jurisdictions the law reviews a hospital's capital spending, its building projects above a dollar threshold. In 19 states there is no certificate of need for hospitals at all. The rest review only new hospitals, beds or services, changed their law between 2011 and 2024, or are unclear from the table.
Certificate of need for hospital building, by state
Number under each state: median change in general hospitals' square feet per bed, 2011 to 2024.
- Certificate of need covers hospital capital spending
- Narrower review: new hospitals, beds, services or some areas only
- Repealed or narrowed during 2011-2024
- No certificate of need for hospitals
- Unclear from the table
Source: Delgam's table of state certificate of need programs; Medicare cost reports (HCRIS). Hover or tap a state for what its law covers.
The same growth
If the laws held building down, hospitals in the first group should have added less space. They did not. General hospitals with usable reports in both years grew their floor space +18.2% in certificate of need states and +19.1% in states without one. Following only the hospitals that reported every year, the two lines barely separate.
Floor space of general hospitals, change since 2011
Hospitals with a usable report in all fourteen years: 639 in certificate of need states, 953 in states without.
Source: Medicare cost reports (HCRIS), Worksheet B-1.
What differs is beds and patients. Hospitals in states without a certificate of need added beds (+3.3%) and discharged more patients; those in certificate of need states did not (−0.4% beds). So space per bed rose a little more where the law applies: the median hospital's went up +18.9%, against +15.7% elsewhere.
Change in square feet per bed, 2011 to 2024, each general hospital
One dot per hospital; the dark tick is each group's median. Changes beyond -60% and +150% are drawn at the edge.
Loading 1,892 hospitals…
Source: Medicare cost reports (HCRIS). Hospitals with usable reports in both years.
The gap goes away region by region
Certificate of need states are not spread evenly. Most are in the East and South, and the largest state without one, California, had some of the slowest growth: +7.8% for its median hospital, across 242 hospitals. Compare hospitals within the same region and the medians nearly match: +19.3% against +19.0% in the Midwest, +20.3% against +19.8% in the South. The Northeast's gap rests on one state without a law, Pennsylvania; the West's on 15 hospitals in Alaska and Hawaii.
Median change in square feet per bed, 2011 to 2024
General hospitals, by region and by size in 2011.
- No certificate of need
- Certificate of need
Source: Medicare cost reports (HCRIS); Delgam's table of state programs.
One more test: shuffle which 37 states count as certificate of need states, 5,000 times, keeping each region's number the same. A gap as large as the real one, 3.2 points, turns up 44% of the time. By this measure the law makes no detectable difference to how much hospitals build.
Nor did it slow the loss of hospitals. The number of general hospitals filing cost reports fell 11.6% in certificate of need states (1,048 to 926) and 8.5% in states without (1,605 to 1,469).
What these numbers cannot show is what would have been built without the laws, or whether the permits shaped where and what hospitals built rather than how much. For how much space the filings ask for, see the Illinois benchmark; for whether approved projects get used, the forecast audit and promised beds.
How each state was classified
| State | Group | What the table records | Hospitals | Median change |
|---|---|---|---|---|
| Alaska | Certificate of need covers hospital capital spending | Active CON. Reviews construction or alteration above a capital threshold (about $1.5 million), bed changes and new services. | 6 | +22.7% |
| Alabama | Certificate of need covers hospital capital spending | Active CON. Covers new facilities, beds, major equipment and capital spending above a threshold. | 63 | +21.2% |
| Arkansas | No certificate of need for hospitals | Permit of Approval covers nursing homes and other long-term care; hospitals are not covered. No change date in the table. | 34 | +15.1% |
| Arizona | No certificate of need for hospitals | CON repealed in 1985. | 45 | +12.5% |
| California | No certificate of need for hospitals | No CON (repealed in 1987). State plan review of hospital construction checks building and seismic safety, not need. | 242 | +7.8% |
| Colorado | No certificate of need for hospitals | CON repealed in 1987. | 39 | +7.6% |
| Connecticut | Narrower review: new hospitals, beds, services or some areas only | Active CON, but capital spending alone has not triggered review since 2010 reforms. Covers new facilities, services, operating rooms, equipment and ownership changes. | 24 | +22.1% |
| District of Columbia | Certificate of need covers hospital capital spending | Active CON. Hospital capital spending of $6 million or more, major equipment, bed moves and new services. | 5 | +36.5% |
| Delaware | Certificate of need covers hospital capital spending | Active Certificate of Public Review. Capital spending over $5.8 million, bed increases and major equipment. | 5 | +16.9% |
| Florida | Repealed or narrowed during 2011-2024 | CON for general acute hospitals ended July 1, 2019 (specialty hospitals in 2021). The table does not describe its earlier scope. | 155 | +14.9% |
| Georgia | Certificate of need covers hospital capital spending | Active CON. New hospitals, beds, capital spending above a threshold and some equipment. | 82 | +13.4% |
| Hawaii | Certificate of need covers hospital capital spending | Active CON. New facilities, capital spending above a threshold, new services and bed changes. | 9 | −10.3% |
| Iowa | Narrower review: new hospitals, beds, services or some areas only | Active CON for new hospitals, bed changes, new services and equipment over $1.5 million. Modernization that adds no beds or services is not reviewed. | 23 | +23.0% |
| Idaho | No certificate of need for hospitals | CON repealed in 1983. | 13 | +19.3% |
| Illinois | Certificate of need covers hospital capital spending | Active CON. Hospital construction or modernization above a yearly capital threshold, new facilities, services and bed changes. | 105 | +22.6% |
| Indiana | No certificate of need for hospitals | No CON for hospitals (repealed in the 1990s, per the table's notes). CON since 2019 covers nursing homes only. | 68 | +22.5% |
| Kansas | No certificate of need for hospitals | CON repealed in 1985. | 36 | +17.1% |
| Kentucky | Unclear from the table | Active CON for new hospitals, bed additions, major equipment and services. The table does not say whether capital spending alone is reviewed. | 59 | +24.8% |
| Louisiana | No certificate of need for hospitals | Facility Need Review covers nursing facilities and other long-term services; hospitals are not covered. No change date in the table. | 66 | +28.9% |
| Massachusetts | Certificate of need covers hospital capital spending | Active Determination of Need, the state's CON. Capital spending above an indexed minimum (about $20 million in 2017 dollars), new beds and services; rules revised in 2017. | 51 | +7.2% |
| Maryland | Certificate of need covers hospital capital spending | Active CON. New or replacement hospitals, bed changes and capital spending above a threshold (roughly $10 million). | 37 | +31.3% |
| Maine | Certificate of need covers hospital capital spending | Active CON. Hospital capital spending and new services above thresholds; master facility plans and expansions. | 14 | +23.6% |
| Michigan | Certificate of need covers hospital capital spending | Active CON. Clinical services, new or replacement hospitals and capital spending above an indexed threshold ($3.3 million in 2019). | 73 | +19.0% |
| Minnesota | Narrower review: new hospitals, beds, services or some areas only | No CON. A hospital bed moratorium requires a legislative exception for new hospitals or added beds; construction without bed changes is not reviewed. | 41 | +16.8% |
| Missouri | Narrower review: new hospitals, beds, services or some areas only | Active CON for new hospitals and major equipment. Construction at existing acute hospitals is generally not reviewed. | 58 | +18.6% |
| Mississippi | Certificate of need covers hospital capital spending | Active CON. Construction, renovation, expansion or replacement above capital thresholds, beds and major equipment. | 41 | +26.3% |
| Montana | Narrower review: new hospitals, beds, services or some areas only | CON mainly for long-term care. Hospital items are rare, and capital spending alone is not reviewed. | 7 | +27.7% |
| North Carolina | Certificate of need covers hospital capital spending | Active CON. New hospitals, beds, operating rooms, equipment and hospital capital spending above a threshold; some services dropped in 2023, capital review kept. | 73 | +15.2% |
| North Dakota | No certificate of need for hospitals | CON repealed in 1995; a long-term care bed moratorium only. | 6 | +17.9% |
| Nebraska | No certificate of need for hospitals | CON covers long-term care and rehabilitation beds only; acute beds and general hospital construction are not reviewed. No change date in the table. | 21 | +10.5% |
| New Hampshire | Repealed or narrowed during 2011-2024 | CON covering hospital capital spending, beds and equipment ended June 30, 2016. | 11 | +13.3% |
| New Jersey | Narrower review: new hospitals, beds, services or some areas only | Limited CON: new general hospitals, bed moves, some services, ownership changes. Most hospital construction is not reviewed. | 57 | +17.5% |
| New Mexico | No certificate of need for hospitals | CON repealed in 1983. | 18 | +16.2% |
| Nevada | Narrower review: new hospitals, beds, services or some areas only | CON only for construction over $2 million in counties under 100,000 people. Clark and Washoe counties are exempt. | 19 | −7.0% |
| New York | Certificate of need covers hospital capital spending | Active CON. Establishment, construction, renovation, beds and major equipment of general hospitals. | 99 | +22.2% |
| Ohio | No certificate of need for hospitals | CON covers long-term care only; hospitals are not subject. No change date in the table. | 94 | +18.2% |
| Oklahoma | No certificate of need for hospitals | CON covers long-term care facilities; acute care hospitals are not reviewed. No change date in the table. | 50 | +25.5% |
| Oregon | Narrower review: new hospitals, beds, services or some areas only | Limited CON for new hospitals, bed increases and relocations. Most hospital renovation is not reviewed. | 28 | +12.5% |
| Pennsylvania | No certificate of need for hospitals | CON ended in 1996. State plan review is for licensing and life safety. | 98 | +13.6% |
| Rhode Island | Certificate of need covers hospital capital spending | Active CON through 2024. Hospital capital spending and equipment above indexed thresholds; a 2026 law narrowed it, after this period. | 6 | 0.0% |
| South Carolina | Repealed or narrowed during 2011-2024 | Narrowed in May 2023 to new hospitals and bed additions, set to end in 2027. The table does not describe its earlier scope. | 42 | +19.0% |
| South Dakota | No certificate of need for hospitals | No hospital CON; a nursing facility bed moratorium only. No change date in the table. | 10 | +44.0% |
| Tennessee | Repealed or narrowed during 2011-2024 | Narrowed by a 2021 reform that removed many triggers; acute hospitals leave CON in 2030. The table does not describe its earlier scope. | 71 | +13.0% |
| Texas | No certificate of need for hospitals | CON repealed in 1985. | 207 | +16.8% |
| Utah | No certificate of need for hospitals | CON repealed in 1984. | 30 | +23.9% |
| Virginia | Certificate of need covers hospital capital spending | Active Certificate of Public Need. New facilities, beds, operating rooms, listed equipment and certain capital spending; narrowed in places in the 2020s. | 62 | +20.4% |
| Vermont | Certificate of need covers hospital capital spending | Active CON. Hospital capital projects, new services and major equipment above thresholds. | 5 | +18.6% |
| Washington | Narrower review: new hospitals, beds, services or some areas only | Active CON for new hospitals, bed increases, tertiary services and sales. Replacing a hospital without adding beds may be exempt. | 38 | +1.0% |
| Wisconsin | No certificate of need for hospitals | No hospital CON; nursing home bed limits only. No repeal year in the table. | 52 | +25.7% |
| West Virginia | Certificate of need covers hospital capital spending | Active CON. New facilities, services, major equipment and capital spending above a threshold (about $5.8 million), with exemptions such as some hospital renovations. | 19 | +24.4% |
| Wyoming | No certificate of need for hospitals | CON repealed in 1985. | 8 | +13.4% |
How these figures were made
- General hospitals' change in building square feet per bed from fiscal year 2011 to 2024, in states whose certificate of need law reviews hospital capital spending and in states with no such law, with state status read from Delgam's regimes table.
- Usable reports only: square feet that passed the panel's checks and a bed count that agrees with bed-days.
- General hospitals are short-term acute hospitals (CMS certification numbers ending 0001-0879).
- A state's status is the regimes table's current description, taken to hold for 2011-2024 unless the table gives a change date.
- CON is set by state, so the permutation test reassigns the label among states, not hospitals.
- No population or demand data are used; growth in patients is not controlled for.
- Hospitals in states that changed their law during the period (Florida in 2019, New Hampshire in 2016, South Carolina in 2023, Tennessee in 2021) and in states the table leaves unclear are not in either group. Several states' entries in the table come from general knowledge rather than the statute; the table says which.
| Group | Certificate of need hospitals | Median | Other hospitals | Median |
|---|---|---|---|---|
| All | 755 | +18.9% | 1137 | +15.7% |
| Northeast | 175 | +18.2% | 98 | +13.6% |
| Midwest | 178 | +19.3% | 287 | +19.0% |
| South | 387 | +20.3% | 357 | +19.8% |
| West | 15 | −0.2% | 395 | +10.5% |
| Under 100 beds | 212 | +24.7% | 395 | +24.6% |
| 100 to 299 beds | 377 | +17.8% | 509 | +13.3% |
| 300 beds or more | 166 | +16.1% | 233 | +11.6% |
| Northeast, under 100 beds | 39 | +16.1% | 25 | +12.8% |
| Northeast, 100 to 299 beds | 95 | +17.8% | 50 | +26.7% |
| Northeast, 300 beds or more | 41 | +19.4% | 23 | +9.7% |
| Midwest, under 100 beds | 46 | +25.0% | 112 | +29.9% |
| Midwest, 100 to 299 beds | 93 | +17.5% | 129 | +22.5% |
| Midwest, 300 beds or more | 39 | +17.6% | 46 | +8.8% |
| South, under 100 beds | 121 | +26.3% | 158 | +25.5% |
| South, 100 to 299 beds | 182 | +17.8% | 132 | +16.2% |
| South, 300 beds or more | 84 | +15.2% | 67 | +17.8% |
| West, under 100 beds | 6 | +11.0% | 100 | +19.2% |
| West, 100 to 299 beds | 7 | +21.6% | 198 | +7.8% |
| West, 300 beds or more | 2 | −9.5% | 97 | +9.7% |