Yesterday The Union Leader, a New Hampshire newspaper, posted an article about the possible shortages of medical supplies and hospital beds during the coronavirus epidemic.
The article notes:
ACROSS the country, state leaders have raised the alarm over the lack of enough beds should the COVID-19 pandemic create a surge in serious and critical cases. They are concerned that they simply won’t have enough hospital beds to care for ill patients and are taking drastic steps to “flatten the curve” – spreading out the timeline of the disease so that the health care system can manage the influx of new cases.
This is just as true in New Hampshire as across the country. However, the prime reason we don’t have more hospital beds is not a lack of demand, but government regulation.
According to U.S. Census data, New Hampshire’s population has grown by 48% since the 1980 census. However, the last new hospital to open in the Granite State did so in 1983.
The reason why our state hasn’t built more hospitals since then isn’t lack of demand. With a growing and aging population, our health care needs have gone up, not down.
The answer why we haven’t seen more hospitals and, thus, more hospital beds is because of government regulations that were intentionally designed to limit competition and choice. Sadly, these regulations have been effective in achieving those goals.
For many years, the prime culprit from new hospital development was the state’s Certificate of Need (CON) board. For someone to get a license to build a new hospital, they would have to go before this board and hope to get a government permission slip to have the opportunity to begin. Unsurprisingly, the CON board became a protection racket for the state’s existing hospitals to stop new development.
Thanks to the work of Americans for Prosperity activists and critical policy champions like Senator John Reagan and former Representative Marilinda Garcia, New Hampshire was able to put an end to the CON board in 2016.
The article cites some other regulations that limit the number of hospital beds:
One regulation forces anyone who wants to open a hospital to have a 24 hour per day, seven day per week emergency department. Given that emergency departments are the most expensive and toughest to staff part of any hospital, this is a huge barrier to opening a new facility.
And, like most cronyism, existing hospitals made sure this requirement doesn’t apply to any hospital that had its license before the law was passed.
Another regulation forces any new hospital to take reimbursement from all payers, regardless of whether doing so makes sense for that hospital’s business model. Across the country, cash-only facilities are thriving, providing lower cost alternatives to patients. But, under state law, they can’t operate in the Granite State.
Finally, one state regulation provides for a 15-mile radius monopoly zone around smaller hospitals in more rural areas. This guarantees that anyone outside of the southeastern part of New Hampshire will never see another hospital being built in their community, or anywhere near them.
While changing these laws won’t help us fight the COVID-19 virus, it’s high time the state legislature begins to remove these barriers to help us deal with the next pandemic. Our public health infrastructure has been unnecessarily hobbled, not by disease, but by special interests.
North Carolina is one of the states with Certificate of Need (CON) laws. According to the National Conference of State Legislatures, 35 states and Washington, D.C. operate a CON program with wide variation state-to-state. I suspect that number is high–they may be including laws that are not technically CON laws. At any rate, North Carolina has been trying to repeal its CON law for a number of years. CON laws interfere with the free market and artificially inflate medical costs by creating monopolies. One way to lower medical costs without sacrificing quality of care would be to remove CON laws. However, hospitals like their monopolies.
