The Human Cost of Outdated Regulations

One mother’s story vividly shows the real-world impact of certificate-of-need laws.


By Elise Amez-Droz and Lyndi Schrecengost

This article originally appeared on The Bridge, an online publication by the Mercatus Center, on September 15, 2020.

“I wish that legislators better understood our actual day-to-day lives and the impact of this outdated legislation. On the most basic level it is difficult to navigate the challenges of a child with special needs. It is even more stressful to have limited options available when you’re faced with a poor company or inadequate nursing staff and don’t have the freedom to seek competent providers to care for your child in your home.”

These are not the words of a pundit, a regulator, a public policy analyst, or an advocate, but the heartfelt, real-world opinions of a mother pushing back against regulations that make the already-daunting job of raising a child with special needs even harder. In this case, the “outdated legislation” that has limited her options is a certificate-of-need (CON) law in the state of Tennessee. These laws require health providers to seek government permission before they can offer new services, expand their facilities, or even buy certain medical devices.

The federal government began encouraging states to enact CON laws in 1974, only to remove these incentives in 1986. Over the past 30 years, some states have repealed all or part of their programs, but CON laws still exist today in 37 states and the District of Columbia. Although the purpose of CON laws was to lower healthcare costs and improve the quality of care, particularly among rural and underserved populations, CON laws have been shown actually to increase costs for patients and lower quality of care.

But what do CON laws mean for real people on a daily basis? What are the implications for families with unique challenges who are not getting the level of care—and the options for care—they urgently need?

A Mother’s Story

Michelle Gross describes her daughter Asher as a determined and bubbly seven-year-old with a mop of startling red curls to match a sassy disposition. Asher was born with a rare chromosomal translocation affecting two different chromosomes. She has a bilateral complete cleft lip and palate. At four months old, she was diagnosed with congestive heart failure owing to a urinary tract infection. A hypoxic brain injury has meant that Asher has a number of developmental disabilities. She is nonverbal, requires a G-tube for nutrition, and has limited gross motor skills. The litany of surgeries and medical procedures Asher has endured in her young life is astounding. In spite of setbacks that would defeat most people, Asher is happy and resilient and shows an irrepressible curiosity about her world.

For Michelle, quality home healthcare and private duty nursing are critical, not just to her daughter’s safety and survival, but to her ability to grow and thrive.

The Gross family lives in Jonesborough, Tennessee, the state’s “oldest town,” with a population of around 5,000. This tiny rural community is precisely the type of area CON laws were supposed to benefit. But according to a study conducted by the Mercatus Center in 2016, without CON the state would have 63 additional healthcare facilities, 26 additional ambulatory surgical centers, and 25 rural hospitals. CON laws have been shown to limit access to healthcare in rural areas and to increase healthcare costs. The Kaiser Family Foundation reports that healthcare costs are 11 percent higher in CON states than in non-CON states. Tennessee currently has two proposals before the General Assembly that would either roll back parts of the CON program, including its CON requirement for home health agencies, or repeal it altogether.

The prospect of legislative reform is heartening, but how do families cope in the here and now, when their immediate needs are overwhelming and their options few? Michelle explains the predicament she faced: “Our first home health agency was extremely difficult to work with. They were inconsistent with continuity of care—switching staff without warning us while my daughter was an in-patient for various procedures or surgeries. We had several nurses enter our home who were not professionally trained in tracheostomy care or in what symptoms and signs to be aware of with a post–open heart surgery patient. Reliability and dependability of staff were also lacking. When I spoke with the company’s director of nursing about the problems, she told me I would have to deal with it on my own. When I said I was going to look for another insurance company to find a better option, she said, ‘Good luck finding another provider. We’re the only one.’”

Urgent Needs Go Unmet

Although Michelle was determined to find better nursing care for her daughter, when she did locate another agency, she was informed that they did not have a CON for her county and therefore could not provide her with the services she needed. This was the first time Michelle had confronted a CON law and its hard realities. “I started to look into Tennessee CON law because I didn’t know much about it,” she says. “I discovered that CON mandates apply to things like the number of hospital beds and hospital equipment. I understand that this was done so that states might be more cost effective in their spending. But it doesn’t make sense when you approach it from the aspect of home healthcare. We had a clear and urgent need, but in a rural county like ours the population will be too small to meet the requirements.”

While Michelle did eventually find another provider that served her county, their administrative offices were in an adjacent county. This made finding staff who were willing to help very difficult, as nurses had to travel an hour to and from work. The lack of sufficient staffing meant that Michelle had to take on more of Asher’s care herself. This jeopardized her own job, which in turn threatened the loss of the family’s primary health insurance. As a single parent, this put her in an impossible position. “I am not required to work a set schedule. However, I have to work enough hours to pay my portion of insurance premiums. My employer saw a decrease in the hours I’d been working and we discussed various options, one of which included terminating insurance coverage if I was unable to work enough hours to cover those costs. This is my family’s primary health insurance and my older daughter’s only insurance. Our primary insurance is also the only payor for Asher’s daily growth hormone injection. I needed adequate nursing coverage so that I was able to work more consistently and maintain our primary insurance coverage.”

Fortunately, after struggling with the out-of-county provider for five years, the agency Michelle had approached earlier was able to get their CON and Michelle could switch over to them. This agency indicated that they had been trying to get their CON for some time and that the process had been both time consuming and expensive.

Although Michelle and Asher’s story has a happy ending, Michelle is troubled by the obstacles her family faced because of CON. She is quick to point out the benefits of restructuring or repealing these laws in Tennessee: “I really think that these struggles to gain access to sufficient care could be resolved if there were more provider options available throughout the state. Additional home healthcare options that offer consistent, adequate, reliable home health nursing services to rural, medically complex pediatric patients would also be a cost saving in that they would reduce the need for rehospitalization—eliminating other kinds of risk, such as infection—and resulting in effective continuity of care.”


Elise Amez-Droz is a Program Manager for the Open Health program at the Mercatus Center at George Mason University, where she manages the health policy portfolio. Lyndi Schrecengost is a freelance writer who focuses on consumer health and public health issues.