March 11, 2020
By Lindsay Killen and Naomi Lopez
Concerns over the potential impact of the coronavirus on the U.S. populace and economy are growing. In the event of a widespread outbreak, the nation’s hospitals will become ground zero, absorbing the massive responsibility of treatment and containment.
Unfortunately, the availability of hospital beds in 38 states is limited by arcane laws called “certificate of need.” Rather than allowing a hospital to be built, adding beds to an existing hospital, or offering some types of new technologies, many states require that these additions be approved by a board of existing competitors with every incentive to restrict new competition from opening or expanding.
Imagine if an Aldi or Whole Foods wanted to build a grocery store or begin offering some new products in your community, but Publix and Kroger were in charge of deciding if the new store’s plans would be approved. As absurd as this situation would be, this is exactly what happens when it comes to hospital capacities in more than two-thirds of states nationwide.
In a new study released this week by the Regulatory Transparency Project of the Federalist Society, Christina Sandefur points out that “38 states still have [certificate of need] laws on their books, and continue to require government approval before building or expanding a healthcare facility or service — approval that can hinge on whether existing hospitals are willing to allow others to enter the market to compete against them.”
We shouldn’t have to wait until there is a looming public health threat to recognize that these crony laws serve to artificially prop up hospitals’ bottom lines at the expense of public well-being and preparedness. As China’s construction of a 1,000-bed isolation hospital in 10 days made international news, leading analysts in the U.S. acknowledged that our bureaucratic system would prevent from responding with similar urgency.
The United States has approximately 900,000 hospital beds, of which the CDC claims about two-thirds are regularly occupied. The World Health Organization estimates “about 80% of coronavirus cases are mild, with others serious or critical”, according to Robert Cyran of Reuters. “So if just 1% of America’s population of 330 million contracted the virus at the same time, there wouldn’t be enough hospital beds. An uneven outbreak could lead to more overcrowding in some cities and critical-care units.”
Indeed, this dynamic is exactly what’s being blamed for the disproportionate impact of the coronavirus in Wuhan, China, where the death tolls have been much higher than other parts of the country. “Stretched medical systems will kill more patients… countries with poor medical care will be hit harder,” explains Cyran. “They lack the ability to find clusters of disease and dampen the outbreak, while patients won’t be treated.”
Yet even as consensus builds towards assuming that certain high-density areas in the U.S. like New York City are nearly guaranteed to be at risk of real public health threats as a result of the coronavirus contagion, city officials weighing hospital bed capacities are demonstrating an apathy towards proactive reforms that would better assure their treatment facilities are ready. The New York Times recently questioned Mayor Bill De Blasio about what would happen if the 1,200 beds currently available to treat affected patients were filled, and he responded, “We’ve got a long time to ramp up if we ever had anything like that.”
State lawmakers have both the authority and the duty to put patients first. They should do so by bringing urgent legislation to immediately remove certificate of need laws, allowing healthcare providers to fully examine how they may expand to meet new demands. Lawmakers shouldn’t wait until there is public health emergency to respond. They must act now.
Lindsay Killen is Vice President for Strategic Outreach at the Mackinac Center for Public Policy. Naomi Lopez is Director of Healthcare Policy at the Goldwater Institute.