Illinois Government Research no. 55 1982: Regulating Hospital Facilities Construction: The Illinois Experience 1975-1979

In the present political climate, reform or elimination of the certificate of need program is a distinct possibility. At the national level, the deregulatory movement has led to attacks on the program by officials in the Reagan administration, who claim it is ineffective in containing capital spending and impedes competition in the industry. In the 1980-81 session of the Illinois General Assembly, legislation was introduced that would have abolished the program. Although unsuccessful, the proposed bill reflects the controversy surrounding the program within the state. As the debate continues, at both the national and state level, it is a good time to examine the experience of the Illinois program. This article does that by analyzing the decisions made by the certificate of need program on hospital proposals from 1975 through 1979 and by examining some evidence of the program's impact. In the first section, we present an overall summary of the program's approval rate in terms of the number and percent of projects approved, withdrawn, denied, and modified; in the next section, we describe the types of projects which the program favors; and in the final section, we discuss some evidence of the program's impact on hospital bed supplies. The complex process by which CON decisions are reached in the state is not addressed in this paper so that we may focus on the results of the process and its possible impacts.published or submitted for publicatio