When we allow the government to interfere with the market, as it has in healthcare for over a 100 years, it always leads to higher costs, less access, and lower quality.
Hospital beds are again filling up across the country as America copes with another variant of the COVID-19 virus. Three quarters of intensive care unit (ICU) beds are occupied at the moment, and 28 percent of those are by COVID patients.
Furthermore, almost half of all states report their hospitals’ ICU beds have exceeded 75 percent capacity. And hospitals across the US report 75 percent of their general inpatient beds are also filled, with 13.4 percent of those being COVID-19 patients.
This is a big problem. Not only does that mean people with the coronavirus may be unable to access needed and timely care, it also means that individuals seeking assistance for other pressing medical issues may be severely delayed.
But, when outlets merely report that hospitals are at or approaching capacity, it neglects a key part of the equation. 75 percent of beds being full sounds scary, but people need to ask: 75 percent of what number of beds in the first place? 75 percent of 200 beds in a given region is a lot of patients; 75 percent of four beds is a different story.
In reality, it doesn’t take much for most hospitals to reach “capacity,” because their supply of beds is already severely restricted even before an emergency takes place. And the reason for that traces right back to government policies that make healthcare more expensive and harder to access for all. Let’s examine a few.
Certificate of Need (CON) Laws
Many Americans are unaware of the presence of Certificate of Need (CON) laws. These laws are appropriately named because they are a total con: an arrangement between the government and large healthcare providers to limit competition and keep prices artificially high.
This is a textbook case of cronyism, which John Stossel defines as “the economic system in which the marketplace is substantially shaped by a cozy relationship among government, big business, and big labor. Under crony capitalism, government bestows a variety of privileges that are simply unattainable in the free market.” Cronyism is not to be confused with free-market capitalism.
Implemented in the 1970s, a total of 27 states still have CON laws in operation, and many of those states—like Alabama, Mississippi, and Arkansas—are the ones most strapped for hospital beds at the moment.
That’s because these laws arbitrarily restrict the amount of beds in a state, as well as the number of hospitals and other medical equipment. They do this by mandating would-be providers go before a board and show evidence of their need to add additional beds, equipment, services, and locations. At the same time, their competitors get to come in and argue against them, and often win out—especially when large hospital corporations (who are often in cahoots with regulators) are pitted against independent providers.
All of this means consumers have fewer healthcare options and higher costs for services.
The US only has 2.6 beds per 1,000 people, which is below