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Department of Justice, Federal Trade Commission Issue Joint Statement on Certificate-of-Need Laws in Illinois
Date:9/12/2008

Agencies Say CON Laws Undercut Consumer Choice, Stifle Innovation and Weaken Markets' Ability to Contain Health Care Costs

WASHINGTON, Sept. 12 /PRNewswire-USNewswire/ -- In a joint statement to the Illinois Task Force on Health Planning Reform, the Department of Justice and the Federal Trade Commission (FTC) stated the agencies' position regarding certificate-of-need (CON) laws, saying that the laws undercut consumer choice, stifle innovation and weaken markets' ability to contain health care costs. Today's statement reiterates the agencies' ongoing efforts to promote competition in health care.

State CON programs generally prevent firms from entering certain areas of the health care market unless they can demonstrate to state authorities that there is an unmet need for their services.

The task force is considering eliminating or amending Illinois' CON requirements. The agencies were asked by the task force to present their views at a meeting to be held in Chicago on Sept. 15, 2008. A representative from the Department will speak at the meeting.

In the joint statement, the agencies said that CON laws impede the efficient performance of health care markets by creating barriers to entry and expansion, to the detriment of health care competition and consumers.

"The Antitrust Division is committed to providing guidance on how to promote competition in the health care industry," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division. "Competition in this important industry benefits consumers by offering lower prices and better quality services."

The statement describes economic research on the effects of CON laws, as well as some of the risks that CON laws can entail. For example, in addition to limiting entry, CON laws create opportunities for existing competitors to exploit the CON process to thwart or delay new competition; they can facilitate anticompetitive agreements amon
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SOURCE U.S. Department of Justice
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