States without certificate-of-need regulations--the controversial law designed to avoid duplicative services in one area--saw slightly lower patient care costs, according to a study published online Wednesday in the journal, Medical Care Research and Review.
After dropping certificate-of-need regulations for open-heart surgery, costs for bypass surgery patients fell 4 percent in those states, researchers at Rice University and Baylor College of Medicine found.
Researchers questioned whether the regulations actually improve quality or control cost and suggest that certificate-of-need deregulation would save money because competition would motivate hospitals to deliver better care.
"It may sound counterintuitive, but recent studies show that higher quality surgery lowers costs because costly hospital complications are avoided when one improves care," lead author and health economics researcher Vivian Ho said in a statement.
Although certificate-of-need deregulation causes more hospitals to build new facilities, the study noted that savings from lower patient costs offset the costs of new facilities.
Fifteen states have stopped their certificate-of-need programs, while still keeping some mechanisms to prevent duplication, according to the bipartisan National Conference of State Legislatures.
Regardless, certificate-of-need programs might not be the last word, as several states permit exemptions and amendments to their requirements. Hoping to do the same, the New Hampshire House of Representative recently passed a bill that will allow for-profit specialty hospitals to bypass the certificate-of-need process and exempts them from paying the state's Medicaid tax.