While proponents argue these regulations help control healthcare costs and prevent unnecessary duplication of services, ASC leaders contend that they stifle competition, drive up expenses and limit patient access to care.
Simon Schwartz, associate director of the Colorado Ambulatory Surgery Center Association and COO of Englewood-based Strategic Resources Group Colorado, is blunt with respect to his opposition to these laws and how they are shaping the future of ASC development.
“CON is not a good thing,” he told Becker’s. “This is my personal belief, not necessarily the association’s stance, but overregulation doesn’t lead to efficiency. Certificates of need — without a very clear understanding of what they are — is a very difficult thing to embrace.”
Mr. Schwartz noted that in many states, the process of obtaining a certificate of need is often influenced by political connections rather than a standardized, transparent system.
“It becomes more about who you know,” he said. “… In states without that structure, it becomes incredibly difficult — you have to know the right politicians and the right people. That doesn’t work toward progress or help patients gain access to quality care at a more affordable price. Instead, it makes care more expensive, requires more time and utilizes more resources. In my view, that’s wasted effort.”
Other ASC leaders echoed Mr. Schwartz’s concerns, pointing to the political and financial barriers that certificate-of-need laws create.
Brett Maxfield, CRNA, president and CEO of Maxfield Healthcare Solutions and president of the Idaho ASC Association, told Becker’s the biggest roadblocks to ASC growth are certificate-of-need laws.
“In many states, it blocks the ability to create new surgery centers, often due to political and financial motives,” he said.
For ASCs, which often offer lower-cost surgical options compared to hospitals, certificate-of-need laws can create an uneven playing field. Established hospital systems, which frequently have more resources and lobbying power, may use the CON process to limit competition and prevent ASCs from entering the market.
“Competitors, like hospitals, are on edge,” Shakeel Ahmed, MD, CEO of Atlas Surgical Group in St. Louis, told Becker’s. “They’re in a definite defense position and employ tactics that are oftentimes anti-business, anti-competitive and keep the ASC industry from reaching its full potential.”
He said in many markets, this can lead to hospital leaders opposing CON applications for ASCs.
“ASCs are at the short end of the stick for the certificate-of-need business because you have to go to the state to apply for one,” Dr. Ahmed said. “In Illinois, not only do you need to get approval to open an ASC, but you also have to obtain approval for each additional specialty. Oftentimes the hospital will bring in the cavalry to oppose you. The hospitals own all the healthcare enterprises around them, and you will frequently see them show up with 30 to 40 letters of opposition.”
While certificate-of-need laws remain in place in most states, North Carolina, Georgia and Tennessee reformed or repealed their requirements in 2024, which could result in significant effects on the ASC industry.
Sam Sarbacker, vice president of development at real estate developer Oman Gibson, told Becker’s that ASC development will soar in Tennessee when the requirement is eliminated.
“As state governments remove these laws, it creates a lot of demand,” he said. “We’re looking forward to potential growth in Tennessee due to the sunset of CON laws, which should be positive for development providers in the state.”
