Why do proponents claim Certificate of Need programs prevent a medical arms race?
Answer
They discourage unnecessary investment in duplicate high-end technology
A medical arms race occurs when competing facilities aggressively acquire identical, expensive, and high-tech equipment to attract patients, even when the community does not need that much capacity. This duplication leads to underutilized machinery and drives up fixed costs, which are often passed on to patients in the form of higher prices. By requiring a permit for such investments, regulators force providers to prove that the equipment is truly necessary for the population, thereby discouraging the wasteful spending associated with competitive over-investment.
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