Permission to Care: How Tennessee’s Certificate of Need Law Harms Patients and Stifles Health Care Innovation  

By | January 26, 2024

Smiling young female doctor standing in a hospital corridor with a diverse group of medical staff standing behind her

Nashville, TN – Americans for Prosperity Foundation (AFPF), today, released a report revealing that Tennessee’s certificate of need (CON) law, over the last two decades, has denied $1.5 billion in new investment in the health care industry, adversely affecting patients in the Volunteer State. AFPF urges the elimination or substantial reduction of Tennessee’s CON program.  More than a dozen states have already done so, resulting in improved health care access and quality. Most recently, South Carolina repealed its CON law last year, a model for Tennessee to follow. 

“Tennessee’s CON regime is costly, unnecessary, and harms patients by restricting access to health care services. Our report highlights how Tennessee’s CON law needlessly delays development of critical care provisions. Americans for Prosperity Foundation calls for comprehensive reform to promote competition, innovation, and better health care outcomes for Tennesseans,” said State Director for Americans for Prosperity Foundation Tennessee, Tori Venable.   

AFPF’s Analysis:  

  • Tennessee’s CON program denied nearly $1.5 billion in proposed health care investment since April 2000.  
  • CON disputes can take years to resolve and cost hundreds of thousands of dollars, diverting resources from patient care and leaving patients without critical care provisions.  
  • The result of so much lost health care investment is that Tennesseans pay higher prices for less access and lower quality health care.

Background: Tennessee’s CON law, enacted fifty years ago, mandates approval from the state before health care providers can add or expand facilities, services, or equipment. Despite substantial evidence suggesting CON laws are ineffective at controlling costs or ensuring access to health care, Tennessee’s program persists. While the Tennessee General Assembly reformed the CON law in 2021, Americans for Prosperity Foundation contends that these changes are arbitrary and insufficient. The labyrinth of red tape and inefficiencies persist, limiting health care access and hindering competition.