This revised proposal from a new investigator seeks to determine whether state Certificate of Need (CON) regulations lead to improved outcomes for patients who receive coronary artery bypass surgery (CABG) or percutaneous transluminal coronary angioplasty (PTCA). Preliminary evidence suggests that CON laws are associated with higher hospital procedure volume for both CABG and PTCA. Given that higher hospital volume has been associated with better outcomes in the medical literature, CON laws may lead to improved outcomes for CABG and PTCA. This proposal will test this hypothesis by combining Medicare claims data with other information sources to answer the following questions: (1) How much does CON regulation increase the average hospital volume for CABG and PTCA? (2) How much does CON regulation reduce the probability of treatment in a low-volume hospital? (3) Does the increased hospital volume associated with the CON regulations lead to improved outcomes for patients receiving CABG and PTCA? (4) Do CON regulations have any additional impact on patient outcomes after controlling for their potential volume effect? (5) Do CON regulations lower the average cost per patient for performing CABG and PTCA? (6) Do CON regulations lead to overall increases in the number of patients receiving CABG and PTCA? The results of this analysis have important implications for assessing the role of regulation in improving the quality of patient care. Several states have dropped CON regulations for cardiac care, and others are debating whether to maintain their CON programs. Yet the ability of CON laws to improve quality by imposing minimum volume standards for providers has never been tested by comparing data across several states. If volume increases associated with CON laws do in fact improve patient outcomes, then the general trend towards relaxing CON regulations should be revisited. [unreadable] [unreadable]