The Effect of State Certificate-of-Need Laws on Hospital Costs: An Economic Policy Analysis¶
Sherman, D. (1988). The Effect of State Certificate-of-Need Laws on Hospital Costs: An Economic Policy Analysis: An Economic Policy Analysis.
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Primes¶
- Monopoly
- A regional hospital that is the only emergency provider within a two-hour drive instantiates the pattern on a service substrate: one locus, a resource (emergency care) with no substitute for time-critical conditions, a wedge (prices well above marginal cost, plus an ability to under-invest in quality without losing patients), and an entry barrier it actively defends by lobbying to block a rival's certificate-of-need.
This sourceFinds that certificate-of-need entry barriers raise rather than restrain hospital treatment costs — evidence that sole-provider hospitals exploit blocked entry to price above cost.
- A regional hospital that is the only emergency provider within a two-hour drive instantiates the pattern on a service substrate: one locus, a resource (emergency care) with no substitute for time-critical conditions, a wedge (prices well above marginal cost, plus an ability to under-invest in quality without losing patients), and an entry barrier it actively defends by lobbying to block a rival's certificate-of-need.
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