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1978 Utah L. Rev. 3 (1978)
Health Planning and Regulation through Certificate of Need: An Overview

handle is hein.journals/utahlr1978 and id is 13 raw text is: Health Planning and Regulation Through Certificate of Need: An Overview* James F. Blumstein** Frank A. Sloan*** Certificate-of-need laws have now been enacted in over two- thirds of the states.' An integral part of the local, state, and national health planning scheme, certificate-of-need statutes are intended to establish a review process by which the proliferation of health care facilities may be controlled. As an introduction to health planning and regulation through certificate-of-need laws, this Article will dis- cuss the rationale for government health planning; the intent and effect of the National Health Planning and Resources Development Act of 1974; the 1974 Act in light of policy perspectives; the evalua- tion of certificate-of-need initiatives by the states; the effect of these initiatives; and the newly proposed Hospital Cost Containment Act. I. WHY PLANNING? In a nation whose institutions have relied on market mecha- nisms for making basic economic choices, governmental imposition of planning bears a burden of persuasion.' Justification for planning in the health sector is typically founded on two rationales. First, government intervention traditionally follows as a remedy for some market failure. The medical marketplace deviates in some signifi- cant ways from classical market assumptions,3 and planning is often promoted as a replacement for the dysfunctional market. A second rationale is found in the economist's view of a merit good.4 This * Work on this article was supported in part by the Vanderbilt Institute for Public Policy Studies and by Grant No. 7-R01-HS 02590 from the National Center for Health Services Research, United States Department of Health, Education, and Welfare. ** Professor of Law, Vanderbilt Law School; Senior Research Associate, Vanderbilt Institute for Public Policy Studies; L.L.B., 1970; Yale Law School. *** Professor of Economics, Vanderbilt University; Senior Research Associate, Vander- bilt Institute for Public Policy Studies; Ph.D. (Economics), 1969; Harvard University. 1. As of January 31, 1978, thirty-six states had enacted certificate-of-need laws. DIVISION OF REGULATORY ACTIVITIES, BUREAu OF HEALTH PLANNING AND RESOURCES DEVELOP- MENT, DEP'T OF HEALTH, EDUCATION AND WELFARE, STATUS OF CERTIFICATE OF NEED AND SECTION 1122 PROGRAMS IN THE STATES (1978). 2. See generally Blumstein & Zubkoff, Public Choice in Health: Problems, Politics and Perspectives on Formulating National Health Policy, INT'L J. HEALTH SEavICES (1978) (forth- coming); Blumstein & Zubkoff, Perspectives on Government Policy in the Health Sector, 51 MILBANK MEM. FUND Q.: HEALTH & Soc'y 395 (1973). 3. Blumstein & Zubkoff, Perspectives, supra note 2, at 405-07. 4. Id. at 407-12.

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