America’s hospitals are unprepared for coronavirus — here’s why you should blame government

The rapidly spreading coronavirus poses one of the most significant public health challenges in modern history. Unfortunately, America’s health care system is woefully unprepared to face it. 

Although the United States has the world’s best hospitals and doctors, and more wealth than any other country on Earth, obscure state laws called “certificate of need” have severely limited the number of available hospital beds across the country, a problem that could have deadly consequences should the present outbreak grow substantially. 

According to a 2018 survey by the American Hospital Association, hospitals in the United States have a total of 924,100 beds, about 2.8 hospital beds per 1,000 people. (This includes all of the beds currently occupied by patients.)

By comparison, this figure is exceptionally low. Italy has 3.2 beds per 1,000 people. China has 4.3 beds per 1,000 people. France has 6.5 per 1,000, and South Korea has 12 hospital beds for every 1,000 of its citizens.

In the midst of a deadly pandemic, a lack of hospital beds can be potentially catastrophic. The sicker a population gets, the more people – especially older citizens – will need to be hospitalized. Even if hospitals were to add emergency beds, it’s likely they would be unable to meet the incredible demand that would exist if the coronavirus infects millions of people.

According to the U.S. Department of Health and Human Services (HHS), under a “moderate” pandemic influenza scenario like the one that hit in 1968, there will likely need to be hospitalizations nationwide — slightly more than the standard capacity of hospitals. (And remember that the total number of hospital beds includes beds already occupied by sick patients with other illnesses.)

Under a “very severe” influenza scenario like the one that gripped the world in 1918, HHS projects the United States would likely experience roughly 9.6 million hospitalizations, a demand that’s so large there’s no way U.S. hospitals could handle it — even after emergency hospital beds are added.

Although there are a variety of factors that help to determine how many beds are in hospitals and other health care facilities, in many states, the most important consideration is certificate of need (CON) laws.

CON laws require most health care providers – not just hospitals – to get permission from a government board before adding new services and equipment, building or expanding facilities, or doing something as simple as increasing the number of hospital beds available.

Certificate of need laws became widespread among the states following the passage of the 1974 National Health Planning and Resources Development Act, which allowed the federal government to withhold health care funding to states

The purpose of CON laws is to control health care spending and improve access to services, especially in areas that are historically underserved.

In reality, these regulations have led to cronyism, driven up costs and limited access to care. A report published by the Mercatus Center in February found, “Controlling for other factors, relative to patients in non-CON states, patients in CON states have access to fewer hospitals per capita, fewer hospital beds per capita, fewer dialysis clinics, fewer ambulatory surgical centers, fewer medical imaging services, and fewer hospice care facilities.”

The effect CON laws have on access isn’t minor, either. Mercatus researchers estimate that if New York – one of the states that has been hit the hardest by the coronavirus – had previously eliminated its CON laws, there would be about 317 hospitals across the state, compared to the little more than 220 that exist today.

Although 14 states have terminated their CON laws since the 1970s, 36 states (plus Washington, D.C.) still have them in place, including in many of the nation’s most populated regions. 

Not only have CON laws unnecessarily driven up health care costs and limited access, they have put millions of lives in danger by reducing the number of available health care facilities and hospital beds in a time of crisis like the one we’re facing today.

It’s well past time states abandon these failed laws and replace them with market-based reforms that encourage expanding access to health care. Doing so would save both lives and money.

Justin Haskins (Jhaskins@heartland.org) is the editorial director and a research fellow at The Heartland Institute, a conservative-libertarian think tank based in Arlington Heights, Ill., that focuses on social, economic and environmental issues and promotes free-market policies. Follow him on Twitter @JustinTHaskins.