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Office of Program Policy Analysis and Government Accountability

Performance Review of the Certificate of Need Program for Nursing Homes Administered by the Agency for Health Care Administration , Report No. 95-51, April 1996
Full report in PDF format

If current trends continue, state expenditures for nursing home care will more than double within the next ten years. Certificate of need (CON) reduces these costs by controlling the supply of beds. However, the program does little to control demand and may limit the state's ability to shift resources to less-costly, long-term care alternatives.

  • By year 2005, the number of individuals over 65 years old in Florida will increase by 19.5%, and the number aged 85 or more will increase by 60%.
  • With expected price level increases, Medicaid expenditures for nursing home care will more than double from $1.11 billion in 1994 to $2.74 billion in 2005.
  • Demand for nursing home care has been heavily influenced by the Medicaid Program, which entitles individuals to receive care in nursing homes but not in other settings.
  • Certificates of need are issued three years in advance; once beds are open, the Legislature may be hesitant to shift funds from nursing homes to less-costly, community-based alternatives.
  • Proposed changes in Federal regulations could eliminate the need for certificate of need.
  • The Legislature should require the Agency for Health Care Administration, Department of Elder Affairs, and Department of Health and Rehabilitative Services to develop a plan for expanding community-based, long-term care alternatives to nursing homes.
  • Planned increases in community-based slots should be subtracted from CON's estimates of the need for new nursing home beds.
  • To avoid a future surplus of nursing home beds, the Legislature should consider either placing a temporary moratorium on the construction of new nursing home beds or increasing target occupancy rates.
  • The Legislature should sunset CON for nursing homes effective July 1, 2001.

Which Government Program Summaries contain related information?

Health Quality Assurance (ACHA)
Community Care for the Elderly
Nursing Home Pre-Admission Screening (CARES)

What other OPPAGA-related materials are available?

  • Report No. 97-73 Follow-Up Report on the Performance Review of the Certificate of Need Program for Nursing Homes, published in May 1998.

Copies of this report in print or alternate accessible format may be obtained by telephone (850/488-0021), by FAX (850/487-9213), in person, or by mail (OPPAGA Report Production, Claude Pepper Building, Room 312, 111 W. Madison St., Tallahassee, FL 32399-1475).
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