Breaking Down Barriers: How Certificate of Need Reforms Are Reshaping Healthcare Construction in the North and South Carolina

For decades, Certificate of Need (CON) laws have shaped how and where healthcare facilities could be built across the United States. Designed to control costs and prevent unnecessary duplication of services, these regulations required healthcare providers to prove to the state that a new facility or service was “needed” before moving forward. But in the Southeast, that long-standing framework is rapidly changing—and the implications are significant.

In states like North Carolina and South Carolina, sweeping reforms are dismantling the traditional CON model, opening the door to a new era of healthcare expansion, competition, and innovation.

The shift in CON laws isn’t just a policy change—it’s a fundamental transformation of the business model that healthcare systems, designers, and contractors have followed for over 50 years. Suddenly, providers can enter markets they’ve long wanted to serve, and designers and builders must rethink how and where they deliver solutions.

“We need to provide innovative solutions to our clients—but to do that, we must understand what they’re facing,” shares Carly Morris, project executive and healthcare market leader for Swinerton’s Carolinas division. “This changes how we approach our work, and how we scale to meet demand.”

With a limited number of qualified architects and contractors in the region, the AEC industry will need to evolve to keep pace with the surge in healthcare development. General contractors, subcontractors, and design teams must adapt to this new environment—and fast.

In 2023, South Carolina made headlines when it passed legislation effectively repealing most CON requirements. The law, signed by Governor Henry McMaster, immediately removed the need for state approval for nearly all healthcare services—with the exception of nursing homes and facilities acquired by the Medical University of South Carolina (MUSC). By 2027, even hospitals will be free from CON oversight.

The result is that if a provider wants to build a hospital in downtown Columbia, SC, they can—no state permission required.

North Carolina’s approach has been more measured but still significant. As part of its 2023 Medicaid expansion law, the state loosened CON requirements for psychiatric and chemical dependency treatment facilities and raised monetary thresholds for equipment and facility upgrades. Over the next few years, additional reforms will eliminate CON requirements for ambulatory surgical centers (ASCs) in urban areas and MRI scanners in larger counties.

The repeal and reform of CON laws in states like South Carolina and North Carolina is creating a healthcare provider race to market. The biggest opportunity? Speed of design and construction.

“Speed to market is everything,” adds Morris. “You don’t want to be the last provider in a market—because by then, demand may already be met.”

However, speed alone isn’t enough. Name recognition and trust are emerging as key differentiators. As more providers enter newly deregulated markets, those with established reputations will have a competitive edge.

Still, the transition brings risks. Projects started under the current CON rules may face delays if regulations sunset mid-construction. This kind of regulatory uncertainty can leave facilities vacant and investments idle.

Swinerton’s Charlotte team is helping clients navigate this new environment with a suite of strategies designed to accelerate timelines and reduce uncertainty. Its design-build delivery model compresses project timelines between the concept stage and final facility delivery. Prefabrication allows construction to begin off-site during the permitting and land acquisition phases. Swinerton is even investigating prototype designs for specific healthcare structures where a standard layout can facilitate rapid deployment across multiple sites.

These approaches aren’t just about building faster—they’re about building smarter. Swinerton partners with its clients to get their projects to market quickly without compromising quality or compliance.

What sets Swinerton apart? A West Coast legacy of innovation is now being applied to the Southeast. While many competitors are East Coast-based, Swinerton brings years of experience in tech-forward construction, policy tracking, and client advisory services.

Morris states, “We’re constantly monitoring policy changes—housing, healthcare, you name it. We help clients understand how laws affect their projects, state by state.”

With internal tools and partnerships that deliver real-time insights, Swinerton empowers clients to make informed decisions quickly and confidently.

The Southeast, once known for strict CON laws, is now a magnet for national healthcare providers. Swinerton is seeing increased interest in both new builds and adaptive reuse—though retrofitting older buildings for medical use often proves just as costly due to plumbing and mechanical requirements. In many cases, new construction can be the more efficient path forward.

Site selection is now a critical factor. Providers are targeting counties adjacent to high-density areas like Mecklenburg, while also expanding access in underserved regions. The goal is to be close enough to major populations while also serving lower-density areas that need better access to care.

Healthcare systems are rethinking ownership models and forming strategic partnerships. UNC and Duke, for example, have combined pediatric services to form NC Children’s, pooling resources for greater regional impact. These kinds of collaborations are reshaping how healthcare is delivered—and how facilities are built.

On the design front, technology and efficiency are driving innovation. Virtual care tools in patient rooms, workflow-based space design, and 3D modeling of MEP systems are becoming standard. Swinerton is using BIM to align architectural and contractor plans, minimizing errors and speeding up construction.

As CON laws continue to evolve, the Southeast is poised for a healthcare construction boom. But this isn’t just about building more—it’s about building better.

“We want to build places that heal people,” says Kevin Smith, vice president and division manager. “Communities deserve state-of-the-art healthcare, and the only way that happens is if we contribute to the places we live and work.”

This moment is more than a regulatory shift—it’s a chance to redefine healthcare access, delivery, and design. And Swinerton is ready to lead the way.