Does the idea that the government can reduce costs and improve quality in an industry (in this case health care) by restricting supply seem dubious to you? If it does, you aren’t alone. Asking the government rather than the free market to determine whether a new entrant into a given health care market would benefit consumers makes little sense from an economic perspective, and can artificially limit the choices available to the public regarding one of the most important commodities—medical care—that some of us will ever purchase.
This essay presents the original rationale behind Missouri’s certificate of need law, explains how the law is implemented, and marshals both theoretical argument and empirical evidence to show that certificate of need law has, unfortunately, achieved the opposite of its intended effect in the Show-Me state. To read the entire essay, click on the link below.