Scope of Regulation
What requires a Certificate of Need in Michigan?
Covered Services & Facilities
Michigan's CON law covers a broad range of healthcare services and facilities, requiring state approval for new projects, expansions, or equipment purchases over a certain cost.
- ➤**Facilities:** Hospitals, Nursing Homes, Psychiatric Hospitals, and Ambulatory Surgical Centers (ASCs).
- ➤**Imaging:** CT, MRI, and PET scanners.
- ➤**Surgical Services:** Cardiac Catheterization, Open-Heart Surgery, and Organ Transplants.
- ➤**Specialized Care:** Neonatal Intensive Care Units (NICU) and Proton Therapy.
The Application Gauntlet
The path to approval is a bureaucratic maze managed by the Department of Health & Human Services (MDHHS) and a governor-appointed commission.
Market Concentration
Who benefits from Michigan's CON laws?
Corewell Health
$15.1B
Total Revenue (2023)
Henry Ford Health
$9.6B
Operating Revenue (2024)
Michigan Medicine
$7.8B
Operating Revenue (2023)
Dominant Insurer
Blue Cross Blue Shield of Michigan holds a staggering ~50-67% of the state's insurance market, facing little meaningful competition.
The Human Cost
Notable legal challenges and their impact.
Huron Valley Hospital v. City of Pontiac (1986)
An Allegation of Anti-Competitive Conspiracy
In a landmark case, Huron Valley Hospital's 1977 CON application was denied after local planners favored an established competitor. The subsequent lawsuit alleged that the CON process was used not to manage resources, but to actively conspire against new market entrants. The courts found evidence of potential abuses, highlighting how CON laws can be weaponized to protect incumbents and stifle competition, a legal battle that underscores the system's capacity for cronyism.
Reform Status
Has Michigan attempted to fix its CON problem?
Michigan has enacted several "reforms" over the decades—notably in 1988, 1993, and 2002. However, these changes have merely tinkered at the edges of a fundamentally broken system. The core apparatus of state-mandated permission slips for healthcare expansion remains firmly in place. The program has never been repealed, and its restrictive power continues to shape the market, favoring large, established players and limiting the entry of innovative, lower-cost providers. The reforms have been cosmetic, not structural.
The Rojas Report Take
Michigan’s Certificate of Need program is a textbook example of regulatory capture, a system that purports to control costs but instead engineers a state-sanctioned cartel. With a CON score of 65, the state’s laws are actively harmful, creating a market where giants like Corewell Health ($15.1B revenue) and Henry Ford Health ($9.6B revenue) are shielded from meaningful competition. This isn’t about community need; it’s about protecting the incumbents' revenue streams.
The data is damning. The state’s three largest health systems hoard over 56% of net patient revenues, while Blue Cross Blue Shield of Michigan commands up to two-thirds of the insurance market. This is the predictable outcome of a system where competitors are locked out by bureaucratic gatekeeping. The Huron Valley Hospital case from decades ago revealed the anti-competitive heart of CON, and little has changed since. The so-called reforms have been toothless, doing nothing to dismantle the legal fortress that protects entrenched interests.
For Michiganders, this means higher prices, fewer choices, and less innovation. It’s a government-mandated barrier to a free market in healthcare, and it needs to end.