Document Type

Capstone

Publication Date

Spring 4-13-2026

Keywords

certificate of need laws, hospital competition, healthcare prices, hospital capacity, synthetic control method, health policy reform, healthcare market regulation, state health policy, Medicaid expansion, hospital bed supply

Abstract

The U.S. healthcare system faces dual challenges: rising hospital prices and declining capacity. Between 2000 and 2024, average hospital expenses per adjusted inpatient day increased from approximately $1,000 to over $3,000, while hospital beds per capita declined from 3.11 to 2.45. This capstone evaluates three policy alternatives to address affordability and accessibility: restrictions on most-favored nation clauses in insurance-provider contracts, elimination of federal tax exemptions on employer-sponsored health insurance, and repeal of certificate of need (CON) laws. Through a comprehensive literature review and a synthetic control analysis of Indiana's 2019 nursing home CON reinstatement, we assess the empirical effects on hospital market capacity and prices. While the quantitative analysis found no statistically significant evidence for or against the effect of CON repeal on hospital expenses or bed supply, systematic policy analysis affirms that certificate of need repeal remains the preferred policy alternative for state leaders seeking to increase healthcare competition, reduce costs, and expand access.

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