March 5^th, 2015

Novi, Michigan:  The Economic Alliance for Michigan (EAM) released a data analysis today demonstrating how states with Certificate of Need (CON) enables health care systems to work efficiently and charge less than those without CON.  Michigan scored exceptionally well, outperforming the national average, as well as the averages of both CON and non-CON states.

“Compared to the rest of the country, Michigan not only charges less per procedure than the national average, but also has higher discharges per facility,” stated EAM President Bret Jackson.  “This demonstrates that Michigan’s CON program is delivering healthcare in a more efficient and cost effective manner than most of the US.”

The analysis looks at Medicare data for various diagnosis-related groups between two groups, CON states and non-CON states.

The average CON facility cared for between 13 percent and 30 percent more Medicare patients than the average non-CON facility.  Also, the average non-CON facility charged between 12 percent and 27 percent more than the average CON facility, based on the particular diagnosis-related group.  More discharges and lesser charges indicates that CON states are more efficient in both productivity and cost.  It is generally believed that higher utilization per facility also leads to better outcomes.

Jackson said, “CON provides an avenue for cost-containment and stability to health care systems.  Michigan’s program is continually reviewing and updating standards and should be looked upon as a model for other states to follow.”

The analysis can be found at https://eamonline.org/research/healthcare/certificate-of-need-cost-discharge-analysis/. For more information on Michigan’s CON program, please visit the state’s Department of Community Health’s providers page at http://www.michigan.gov/mdch/.