Executive Summary

Certificate of need (CON) laws artificially restrict the supply of health care services, causing shortages, reducing quality, and increasing prices by stifling competition. These laws require health care providers to obtain state approval before initiating certain projects. CON regulations were intended to decrease health care costs by preventing the unnecessary duplication of medical services and ensuring equitable access to care. While these policies were well-intentioned, the evidence overwhelmingly indicates that CON laws have not achieved their goals.

Informed by decades of research and practical experience, many states are rolling back their CON laws or repealing them altogether. Yet, despite the growing recognition that these laws are counterproductive, Kentucky retains some of the country’s most restrictive CON rules.

This policy brief describes Kentucky’s health care challenges, examines its current CON laws, summarizes relevant empirical research, and discusses evidence-based CON reforms that would improve access and competition in Kentucky’s health care system.

Kentucky’s Health Care Landscape: Shortages, Affordability Challenges, and Infrastructure Needs

While health insurance coverage in the commonwealth has reached historic highs over the past decade, Kentuckians still struggle to receive timely, high-quality care. Shortages of critical health care providers, exacerbated by CON laws that make it costly to expand services, have lengthened wait times for routine appointments and forced patients to drive long distances for specialty care. Low levels of competition in the health-care sector have also led existing providers to raise prices, exacerbating access problems for people with low incomes.

These shortages are such a critical problem—and not just in Kentucky—that the federal government has labeled and studied them. Health professional shortage areas (HPSAs) are areas that lack the health care infrastructure to provide adequate services to the local population. Of Kentucky’s 120 counties, 114 are classified as primary care HPSAs and 115 are classified as mental health HPSAs. Shortages are particularly common in rural counties. Kentucky needs more than 420 additional primary care and mental health professionals to resolve these shortages. Figure 1 shows Kentucky’s HSPAs.

Making care inaccessible does not reduce Medicaid spending. Kentucky’s Medicaid budget is one of the fastest-growing components of state spending, with these dollars often spent on expensive, late-stage interventions in traditional hospital settings rather than less-costly preventive and earlier-stage care. Without a regulatory environment that encourages primary care clinics and lower-cost surgical centers to open, Kentuckians will continue to face a health care system that is difficult to access, expensive for both patients and taxpayers, and increasingly unable to meet the needs of an aging population.

On average, states with CON programs have 8% higher premature mortality than states without these regulations. Premature mortality quantifies the gap between a person’s age at death and their life expectancy. As such, it reflects early deaths from causes such as unmanaged chronic diseases, certain infectious diseases, and drug overdoses that could have been prevented through better access to health services and supports. On this measure, Kentucky ranks seventh worst in the United States.

There are many real-world examples of Kentucky’s CON laws undermining access to care. Here are three that illustrate the laws’ care-denying consequences.

In 2017, a pair of Nepali immigrants attempted to open a home health agency in Louisville to provide services to Nepali-speaking residents who could not find services in their native language. The entrepreneurs’ CON application was opposed by one of Kentucky’s largest providers of home health care. Because Louisville’s existing supply of home care services already met the state’s standard of “need” based purely on number of patients, state officials rejected the CON application. The importance of customized services to accommodate language-specific communities had not been contemplated in the state health plan, so officials deemed this critical aspect of the project irrelevant in deciding whether to grant a CON.

In 2019, an effort to obtain a CON to build a $24 million ambulatory surgical center in Fort Mitchell was derailed after more than two years of litigation initiated by a rival hospital system. This action, which deprived about 170,000 residents of the surrounding Kenton County of additional outpatient surgical options, was taken despite the fact that Kentucky, on a population-adjusted basis, has less than half as many ambulatory surgical centers as the U.S. average.

In 2022, Kentucky denied a CON application by UofL Health to convert 33 acute care beds into 33 adult psychiatric beds, despite the hearing officer acknowledging that the arbitrary formulas used to determine community need were likely flawed.

These incidents reveal how well-intentioned regulations can be manipulated to serve corporate interests rather than advance the common good.

Certificate-of-Need (CON) Laws in Kentucky

Kentucky’s CON laws constitute one of the most extensive regulatory gatekeeping systems in the nation. They cover 19 specific types of facilities, from hospitals and psychiatric facilities to highly specialized facilities like kidney disease centers, hospices, and even home health agencies (see table 1).

Depending on the proposed project’s capital expenditure, CON application fees can reach $25,000. In addition, Kentucky’s CON process is so bureaucratic and convoluted that applicants often find it necessary to partner with expensive law firms specializing in CON law.

A recent analysis examined every CON application submitted in Kentucky from 2019 to mid-2023. During that time, 98 complete applications underwent substantive (formal) review, of which 71% were approved. However, incumbent providers are given broad latitude to challenge CON applications from potential competitors or to demand additional hearings to delay entry. When would-be competitors opposed the CON application, the approval rate plummeted to 43% and the average time to reach a final decision nearly doubled, from 5.4 months for unopposed applications to 10.2 months for opposed applications. Still more applications were likely never submitted due to the costly and time-consuming process.

Further, Kentucky does not merely require CON approval to open a new health care facility. Existing providers must obtain a new CON for a wide variety of activities, including capital expenditures that exceed certain thresholds, substantially increasing bed capacity or health services, acquiring major medical equipment, or altering a location designated on a previous CON.

Figure 3 compares Kentucky’s CON restrictions to those in its seven bordering states. Kentucky’s score of 100 out of 100 indicates CON barriers in every category measured. Only two bordering states received the same maximum score for CON stringency. By contrast, Indiana and Ohio have eliminated most of their CON regulations and received the lowest (best) scores.

How CON Laws Affect Patients’ Access to Health Care

Research consistently concludes that CON laws restrict supply and protect existing providers. It offers little evidence that CON laws expand access. Rather, states that repealed hospital CON laws saw an increase in hospital facilities of approximately 3.8% in rural areas and 3.9% in urban areas over the ensuing two decades. This pattern is consistent with stronger competition and broader choices for patients.

Research also suggests that CON laws can be consequential in high-need areas such as behavioral health. CON restrictions on substance use disorder treatment facilities are associated with higher emergency department use and worse health outcomes for vulnerable populations. Other work finds that substance abuse CON laws impact how treatment facilities structure payment, including reduced acceptance of private insurance, which may shape who can access care.

In Kentucky, behavioral health capacity remains a central policy concern. The state has about 70 residential substance use disorder treatment beds per 100,000 residents, one of the highest rates in the country and well above the national average, highlighting the scale of treatment demand and infrastructure in the state. This translates to roughly 3 to 4 treatment beds in a community of 5,000 residents, emphasizing both the importance of treatment infrastructure and the challenges small rural areas face in maintaining access to care. While this reflects substantial treatment capacity, policymakers continue to debate whether existing regulatory structures, including CON requirements, help maintain this capacity or instead limit how quickly providers can expand services when demand increases.

How CON Laws Affect Health Care Quality

Another longstanding claim is that CON laws improve health care quality by preventing “excess capacity” and concentrating services in high-volume facilities, The argument is that when providers perform certain procedures more frequently, they gain experience and achieve better patient outcomes, so limiting the number of providers may help ensure that services are delivered by higher volume facilities. However, the empirical evidence offers little support for this argument.

Analyses comparing hospitals in CON and non-CON states find that several mortality measures are worse in CON states. The 30-day mortality rate for heart failure is about 0.2 percentage points higher, meaning that for every 1,000 heart-failure patients discharged from the hospital, an additional two die in CON states. For pneumonia patients, the 30- day mortality rate is approximately 0.38 percentage points higher in CON states, implying four additional deaths per 1,000 discharges.

Mortality among surgical inpatients with serious treatable complications is also higher in CON states, averaging about six more deaths per 1,000 discharges. In short, the research does not show consistent quality improvements attributable to CON regulations, and in some cases it suggests the opposite.

How CON Laws Affect Health System Capacity and Costs

During the COVID pandemic, states with bed-specific CON requirements experienced higher hospital bed utilization rates and were more likely to operate near or at full capacity, suggesting tighter supply conditions. Separate research finds that in states with high hospital bed utilization, temporary CON reforms during the pandemic were associated with reductions of approximately 20 COVID-19 deaths and 30 deaths from natural causes per 100,000 residents, along with roughly 3 fewer deaths per 100,000 from other respiratory-related conditions requiring similar hospital resources. Kentucky issued temporary emergency orders that eased certain regulatory requirements to expand hospital capacity in response to surging demand.

These temporary waivers highlight that existing regulatory requirements can limit flexibility during sudden surges in demand and may require emergency intervention to allow providers to expand capacity quickly. More broadly, the literature concludes that CON laws have not reliably reduced health care spending and may instead limit competition without delivering clear cost savings.

How CON Laws Affect Cost-Shifting and Rural Hospital Stability

Many states, including Kentucky, face hospital closures that have significant community impact. CON supporters argue that limiting entry helps protect small rural hospitals from competition that may threaten already thin operating margins and reduce their ability to sustain essential services. The concern is that if new providers enter the market and concentrate on higher-margin services, rural hospitals may struggle to operate profitably.

A frequent concern among policymakers is that repealing CON laws may encourage new entrants to focus on the most profitable service lines, such as cardiac, orthopedic, or imaging services, while leaving full-service hospitals responsible for treating uninsured patients and providing less profitable services such as emergency or trauma care. Under this view, CON laws help preserve hospitals’ ability to cross-subsidize uncompensated care and to maintain broader service offerings.

However, empirical evidence on whether CON laws effectively prevent cost shifting or strengthen financial stability is mixed, and the broader literature does not clearly demonstrate that these regulations reliably protect access to care for vulnerable populations. Empirical research also does not consistently support the claim that CON laws improve rural access or stability. Evidence from states that repealed CON laws shows increases in the number of hospitals in both rural and urban areas, suggesting that entry restrictions may not be necessary to preserve rural facilities.

Evidence-Based Reforms to Kentucky’s CON Laws

Kentucky’s CON laws represent barriers to entry that prioritize the protection of incumbent businesses over patient access and market innovation. The commonwealth has an opportunity to modernize Kentucky’s approach while preserving appropriate health and safety oversight. The reforms below would ensure the state’s health system can expand and respond when and where patients need care. Many of these changes have been successfully implemented in other states. None of these reforms requires an immediate, full repeal of Kentucky’s CON program.

1. Raise project review thresholds.

Kentucky should reserve intensive CON reviews for high-dollar projects most likely to affect regional capacity planning and public spending. Raising the capital expenditure and major medical equipment expenditure thresholds that trigger CON review would reduce red tape for routine expansions, renovations, and upgrades that can improve access and reduce wait times—especially in underserved communities.

2. Streamline the review, hearing, and appeal process.

Clear guidance, accessible advisory opinions, and firm timelines for review would reduce administrative burdens and encourage investment. When providers do not know how rules will be applied—or fear that projects will be stalled in extended hearings or appeals— many choose not to proceed. Improving predictability and transparency can help restore confidence in the process.

3. Prevent conflicts of interest in the CON review process.

Reforms should limit who can trigger hearings and prolong proceedings. Instead of allowing existing providers to formally oppose new applicants, decisions should be based on clear evidence and consistent rules that focus on the needs of patients and communities rather than protecting the market share of existing providers.

4. Exempt high-need services from CON regulations.

Exempting mental health and substance use treatment services from CON regulations would help ease Kentucky’s persistent shortages in psychiatric hospital care and chemical dependency programs. Similarly, exempting rural providers from CON review would help direct investment to underserved communities. Kentucky has already taken an important step in this direction by easing CON restrictions on birth centers.

5. Eliminate CON laws for lower-cost alternatives to hospital care.

Kentucky should eliminate CON requirements for services that are unlikely to be overused and that frequently provide lower-cost alternatives to hospital care. This includes ambulatory surgical centers, dialysis centers, home health agencies, hospice care, and other specialized treatments. Access to these services is already constrained by insurance oversight and medical standards, making additional entry barriers unnecessary.

6. Codify emergency flexibility.

Introduce greater CON flexibility to improve health system resilience during public health emergencies. Kentucky’s ad hoc CON policy changes during the pandemic allowed providers to expand services and capacity more rapidly than usual but also created significant uncertainty for providers. Establishing a statutory automatic suspension of CON requirements during declared public health emergencies would help ensure that providers can scale capacity quickly when it is needed most.

Conclusion

Kentucky’s CON laws are among the most restrictive in the nation and have reduced access to vital health care services. The real impact of these laws is not just inconvenience or increased costs, but a lower quality of life for Kentuckians.

A large body of evidence indicates that straightforward reforms to Kentucky’s CON laws would yield tangible benefits for patients. Modest, incremental changes can reduce the power of entrenched interests, empower entrepreneurship, attract investment to the health care sector, and better align Kentucky’s health care regulations with the current needs of its population—all while maintaining safety oversight.

Liam Sigaud is a Research Analyst with the Knee Regulatory Research Center working within the fields of health and labor economics.

Edgar Orozco is a third-year Ph.D. student in economics at West Virginia University concentrating in health and urban economics.

Ed Gallrein won Republican nomination for U.S. House in Kentucky’s 4th Congressional District, beating incumbent Rep. Thomas Massie on Tuesday. Trump handpicked Gallrein after Massie broke with him over issues including the release of the Jeffrey Epstein files.

Watch Massie’s full concession speech in the video player above.

In announcing that he conceded defeat to Gallrein, Massie also made a jab at his opponent over the millions of dollars poured in to the race by pro-Israel groups to try to defeat the incumbent.

WATCH: After Massie defeat, Trump says it ‘doesn’t work out well’ when GOP members vote against him

“I would have come out sooner, but I had to call my opponent and concede and it took a while to find Ed Gallrein in Tel Aviv,” Massie told the crowd.

Massie has voted against U.S. aid to Israel and faced accusations of antisemitism. He has denied the charges, arguing that he is generally against all foreign aid.

The race drew in millions of dollars against Massie from pro-Israel interest groups, including from the Republican Jewish Coalition Victory Fund.

The Kentucky congressman claimed in his speech after his defeat that young voters were still on his side.

“People that want somebody that will go along to get along, I’ve never heard of that strategy but that seems to be what the voters want,” Massie said. “But not the young voters.”

The crowd was still energetic despite Massie’s loss, and started a chant of “No more wars!” that the congressman joined in on. Massie’s speech meandered through different topics and touched on other politicians before another chant started of “America First!”

“We stirred up something. There is a yearning in this country for someone who will vote for principles over party,” Massie said.

Rep. Thomas Massie’s loss in Kentucky solidifies Trump’s influence over the Republican Party. Relatives mourn the victims of the deadly mosque shooting in San Diego. And an American doctor with Ebola is evacuated to Germany for treatment.

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Here’s what to know today.

Trump notches GOP primary wins, but midterm questions remain

President Donald Trump scored his biggest win yet in his mission to eliminate political enemies within his own party, as former Navy SEAL Ed Gallrein won the Republican primary in Kentucky’s 4th Congressional District over Rep. Thomas Massie. Gallrein, Trump’s chosen candidate, won 54% of the vote, aided by an extraordinary ad blitz fueled largely by pro-Trump and pro-Israeli groups.

In successfully ousting Massie — who opposed the president on key issues — Trump continues to prove that he can not only influence GOP voters but also attack Republicans who have opposed him without feeling like there are significant negative consequences.

But Trump did not outright win everything he touched. In Georgia’s race for governor, Trump-backed Lt. Gov. Burt Jones and billionaire Rick Jackson are headed to a runoff for the Republican nomination. (The winner of the runoff will face Democratic candidate and former Atlanta Mayor Keisha Lance Bottoms.)

Despite the wins, it’s unclear how Trump’s GOP primary dominance will play out in the midterm general election. His low approval ratings and the war with Iran may raise red flags among voters who supported the president’s “America First” agenda. And his surprise endorsement of Texas state Attorney General Ken Paxton a week before the runoff against longtime Sen. John Cornyn has some wondering if the president should’ve kept quiet.

Read the full story here.

More election results:

• Democrats picked candidates for four key districts in Pennsylvania in the party’s battle for the House.

• Pennsylvania Gov. Josh Shapiro and state Treasurer Stacy Garrity will face off in the race for governor. The result wasn’t unexpected, but the outcome of the race could have a big impact nationwide.

• Rep. Andy Barr won the Republican primary in the race for retiring Sen. Mitch McConnell’s seat in Kentucky.

• Rep. Mike Collins and former football coach Derek Dooley are heading to a Senate Republican primary runoff in Georgia, vying to take on Democratic Sen. Jon Ossoff.

• Sen. Tommy Tuberville won the Republican primary for governor of Alabama, making him the clear favorite to win the general election.

• In the race to succeed Tuberville, Rep. Barry Moore advanced to a Senate primary runoff, and two rivals are battling for the second spot.

• State Sen. Christine Drazan won the Republican nomination for governor of Oregon, setting up a rematch against Democratic Gov. Tina Kotek.

More politics news:

• The Senate voted to advance a resolution to end the war in Iran after GOP Sen. Bill Cassidy flipped his vote to “yes.”

• Months before a $1.8 billion “anti-weaponization” fund was announced, a Trump administration official told a GOP ally that big payouts were coming for Jan. 6 defendants.

• The DOJ said the federal government won’t take legal action against Trump, his family members and companies as part of Trump’s settlement agreement with the IRS.

Steve Kornacki answers your questions live today

At 2 p.m. ET, NBC News’ chief data analyst will take questions from subscribers in a livestreamed Q&A. Ask Steve anything — go deeper into Tuesday’s election results, delve into burning questions about the midterms or learn more about his career and life in front of the Kornacki Cam. Submit your question here.

San Diego mosque shooting victims identified as investigators probe writings

A day after two gunmen killed three people at a San Diego mosque, loved ones remembered the victims as important pillars of the community while investigators looked into the suspects’ possible writings, filled with extremist material.

The victims were identified as: Security guard Amin Abdullah, whose daughter called him her best friend and said he was so dedicated to his job that he would skip lunch to stay on duty. Mansour Kaziha, a community leader who managed the mosque store for nearly 40 years. Imam Taha Hassane said he was the mosque’s handyman, cook, caretaker and storekeeper. “He was everything,” Hassane said. And Nadir Award, who rushed to protect the school when he heard the shooting and is being remembered for his generosity and presence in the community. More about the victims.

Meanwhile, investigators are trying to authenticate a document posted online that purportedly details the motivations of the gunmen. The 75-page document has sections apparently written by Caleb Vazquez, 18, and Cain Clark, 17, and includes material that espouses anti-Islamic, antisemitic and anti-LGBTQ views and promotes white supremacist ideology. More about the documents.

American doctor with Ebola evacuated to Germany

The American surgeon who contracted Ebola in Congo was barely able to stand on his own as he departed the country to be flown to Germany for treatment, according to two leaders of the Christian missionary group where he worked.

Dr. Peter Stafford “looked really tired and really sick,” said Dr. Scott Myhre, the East and Central Africa area director for the group, called Serge.

Stafford’s wife, Rebekah Stafford, is also a doctor and treated the same patient thought to have infected Stafford. She and the couple’s four young children remain in Congo, where they are being monitored.

How Stafford is thought to have contracted the virus.

There are now more than 600 suspected cases and 139 suspected deaths from the virus, the head of the World Health Organization said today.

Read All About It

• A U.S. indictment of former Cuban President Raúl Castro, 94, is expected in Miami.

• Meta is expected to announce today a company reorganization that includes moving 7,000 employees into roles focused on AI and layoffs affecting 10% of the company, a source said.

• The NAACP launched a campaign calling on Black student-athletes to boycott Southern colleges after a Supreme Court decision that weakened the Voting Rights Act.

• A Minnesota woman paid $99,000 to an insurance company to generate retirement income for life. Then, the company collapsed.
• Tens of thousands of people flocked to the streets of North London late Tuesday after soccer club Arsenal clinched its first English Premier League title in 22 years.

Staff Pick: Amid prospect of ICE at World Cup games, vendors weigh their livelihoods against safety

The upcoming World Cup will bring some of soccer’s biggest stars to the U.S., but at the site of one of the stadiums hosting multiple games, a sense of unease is palpable. This story from breaking news reporter Marlene Lenthang examines the feelings of Latino vendors in and around SoFi Stadium in Inglewood amid the possibility of ICE agents working games — a gamble between their safety and a potentially lucrative payday.

The Los Angeles region was rocked last year by sprawling immigration raids targeting day laborers and factory workers. While the glitz and glamor of soccer’s most prestigious competition coming to town has generated excitement in some quarters, Marlene’s interviews with vendors highlights the worry that continues to linger for others. — Rudy Chinchilla, breaking news editor

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