The Removal of Florida Certificate of Need: Anticipating Impact to Hospitals Across the State

By Charles Peck, Brian Fisher, and Ally Grant

As of July 1, 2019, the Florida legislature removed statewide certificate of need (CON) regulations for general hospitals, categorized as “Class I facilities.” The bill will repeal CON regulations on Class II facilities, which include specialty hospitals serving a certain age or gender, by July 2021.

Other states have previously lifted this restriction to increase competition and patient choice across the state. Removal of CON allows facilities to expand as they desire and as stipulated by law, without the approval of the state. Florida has become the 16th state to deregulate CON in some fashion. 

However, there is continued speculation on the pending impact facing hospitals and health systems. Those in favor of CON removal stand firm on the idea that new competition will enhance value and access, reducing total cost of care for patients. Those opposed suggest CON laws protect the stand-alone, not-for-profit community hospitals; the removal of CON provides advantage for well-capitalized health systems (most notably corporate, for-profit health systems) to grow, placing competitive pressures on community-based hospitals and employers.

For years, Texas has often been the case study cited by CON proponents, accused of causing “empty beds and poor levels of care” as the state entirely deregulated CON in 1985, with mass hospital closures in just the first 10 years following CON repeal.

Nearly 35 years later, the provider landscape and population has changed substantially. Thus, Navigant has compiled several analyses and data points to conduct an in-depth assessment of today’s Florida provider market and trends to anticipate the impacts to hospitals due to the recent removal of CON.

Download: THE REMOVAL OF FLORIDA CERTIFICATE OF NEED: ANTICIPATING IMPACT TO HOSPITALS ACROSS THE STATE
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