New Jersey
New Jersey's CON laws, enacted in 1971, create significant barriers to entry. The state's own data reveals that even "expedited" reviews suffer from extreme delays, protecting large incumbent systems from competition and limiting patient choice.
What CON Covers in New Jersey
New Jersey's CON program is administered by the Department of Health. While reformed in 1998 to exempt some services, the core regime remains a significant hurdle for new facilities and service lines, with incumbents able to object and litigate to block competitors.
| Category | Services Requiring CON Approval |
|---|---|
| Facilities | New general hospitals, Long-term care facilities, Rehabilitation hospitals |
| Specialized Care | Maternal and child health, Pediatric intensive care, Psychiatric beds, Organ transplantation services |
| Community Services | Home health agencies |
The Application Process
The process is notoriously slow. State auditors found that even "expedited" reviews take an average of 213 business days, far exceeding the statutory timeline of 90-180 days. This bureaucratic inertia serves as a powerful deterrent to potential applicants and a shield for established providers.
| Review Detail | Value |
|---|---|
| Reviewing Agency | New Jersey Department of Health |
| Application Fee | $7,500, plus 0.25% of project cost over $1M |
| Actual Review Timeline | 145-260 business days |
| Can Competitors Intervene? | Yes. Incumbents can object, submit comments, and litigate. |
Who Benefits from CON in New Jersey
The primary beneficiaries of New Jersey's CON laws are the state's dominant hospital systems and its largest insurer, which face limited competition and can maintain high prices.
Held by the state's largest insurer, Horizon BCBSNJ.
Combined share of Hackensack Meridian and Englewood in Bergen County.
Of the top two hospital systems, RWJBarnabas and Hackensack Meridian.
Core CON regime for major facilities remains intact despite minor changes.
Dominant Hospital Systems by Revenue
"Braven Health, a Medicare Advantage plan, is a joint venture between Horizon BCBSNJ, Hackensack Meridian Health, and RWJBarnabas Health — the state's dominant insurer and its two largest hospital systems."
The Human Cost of CON
CON laws are not abstract. They have real-world consequences, enabling state agencies to block even previously approved projects, thereby denying communities access to needed care.
Newton Medical Center Psychiatric Beds
In a striking example of bureaucratic obstruction, the New Jersey Department of Health denied an extension for a previously approved Certificate of Need for Newton Medical Center to add 9 new psychiatric beds. The initial CON had been granted, acknowledging the need for expanded mental health services in the community.
However, when the hospital required an extension to complete the project, the state reversed course. The Department cited a "lack of progress" and "changing capital priorities" as its reasons for the denial. This decision effectively killed the project, preventing the addition of crucial mental health capacity.
The case demonstrates the immense power of the state agency within the CON process. Even after a project has been deemed necessary and approved, it can be blocked years later, leaving community health needs unmet and illustrating how CON can stifle the development of essential services.
A History of Incomplete Reforms
New Jersey reformed its CON law in 1998, but the changes were superficial, leaving the core anti-competitive structure in place for the most profitable healthcare services.
New Jersey (CON Intact)
The 1998 reform created exemptions for certain services like ambulatory surgery and PET scans, but it preserved the CON requirement for new hospitals, specialized services, and long-term care, protecting the most lucrative revenue streams for incumbent systems.
States That Reformed
States that have fully repealed their CON laws have seen increased competition, lower costs, and better access to care, particularly in rural areas. They demonstrate that a free market in healthcare delivery is possible and beneficial.
| Evidence of Failure | Impact |
|---|---|
| Extreme Delays | Average of 213 business days for an "expedited" review discourages new entrants. |
| Market Concentration | Two hospital systems dominate the state, and one insurer controls 71% of the market. |
| Incumbent Protection | The state has used its authority to deny extensions for previously approved, necessary projects. |
The Rojas Report Take
New Jersey's Certificate of Need law is a masterclass in managed competition, where the state doesn't eliminate the racket, it just picks the winners. While they carved out exemptions for politically favored services years ago, the core system remains a fortress for the giants. RWJBarnabas Health and Hackensack Meridian Health, pulling in a combined $18.5 billion, don't have to worry about real competition in their most profitable service lines; the state's permission-based system handles that for them.
The most damning evidence? The process itself. They call it 'expedited' review, but the state's own auditors found it takes an average of 213 business days — more than double the legal timeline. This isn't regulation; it's a deliberate slowdown to protect the incumbents. When a hospital can't even get a simple extension on already-approved psychiatric beds, as happened with Newton Medical Center, it's clear the system is designed not for public need, but for incumbent protection.
New Jersey's CON isn't a shield for patients; it's a sword for the established players.
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Data sourced from state Departments of Health, the Mercatus Center, and independent research.