3 Ways Government Regulation Is Creating a Hospital Bed Shortage

3 Ways Government Regulation Is Creating a Hospital Bed Shortage by Hannah Cox, 8/31/21, Foundation For Economic Education

Hospital beds are again filling up across the country as America copes with another variant of the COVID-19 virus.

3/4 of intensive care unit (ICU) beds are occupied at the moment, & 28% of those are by COVID patients.

Furthermore, almost half of all states report their hospitals? ICU beds have exceeded 75% capacity. And hospitals across the US report 75% of their general inpatient beds are also filled, with 13.4% 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 & 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% of beds being full sounds scary, but people need to ask: 75% of what number of beds in the first place? 75% of 200 beds in a given region is a lot of patients; 75% of 4 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 govt policies that make healthcare more expensive & 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 govt & large healthcare providers to limit competition & 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 govt, big biz, & big labor. Under crony capitalism, govt 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 70s, a total of 27 states still have CON laws in operation, & many of those states?like Alabama,

Mississippi, & 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 & other medical equipment. They do this by mandating would-be providers go before a board & show evidence of their need to add additional beds, equipment, services, & locations. At the same time, their competitors get to come in & argue against them, & often win out?esp. 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 & higher costs for services.

The US only has 2.6 beds per 1,000 people, which is below the rate we see in countries like Italy, China, & South Korea. Acc. to reporting by Reason, ?Since Mar 2020, states that use CON laws to regulate the supply of hospital beds have seen an average of 14.99 days/month where ICU capacity has exceeded 70%, acc. to Matthew Mitchell, a senior research fellow at the Mercatus Center who crunched Dept of Health & Human Services (HHS) data...Meanwhile, states that don't have CON laws governing the supply of hospital beds have seen an average of just 8.65 days/month with ICU capacity exceeding 70%, acc. to Mitchell.?

Mitchell & his colleagues also found that states using CON laws to regulate healthcare have fewer hospitals, dialysis clinics, & surgical centers. And on top of all of that, even more studies show CON laws lead to lower quality of care, higher risks of complications after surgery, & even higher mortality rates for some conditions.

All of this was true & problematic long before COVID, but the pandemic exacerbated the pre-existing condition.

Mandatory Vaccinations for Healthcare Workers ================================== The govt?s contribution to the healthcare shortage doesn't end with CON laws, though. It has also implemented policies & pushed practices that have led to a shortage in healthcare workers.

As one nurse in Tennessee, who spoke to me on the condition of anonymity, put it, ?To be honest, the biggest problem we?re having is nurses to staff the beds. We say we are maxed out, but it?s usually more that we don?t have the staff to take care of the people rather than the physical space to put them.?

Why don?t hospitals have the nurses they need? Where to start.

Nurses unquestionably have one of the hardest jobs in the country?physically & emotionally. They work incredibly long hours, have to move heavy patients, are often abused by patients in distress, & deal with all of the grossest aspects of the human body. The pandemic has only added to that, & many have expressed feelings of despair & burnout for months.

They do all of this even while their salaries have been stagnating for some time.

Now, on top of everything else, they are being forced to make a choice between getting vaccinated or leaving their jobs. And many have decided enough is enough. Bloomberg reports 1 in 8 nurses say they won't take the vaccine.

As a result, 150 medical pros were fired in Houston over refusals to take the vaccine. Shortly thereafter, Houston suffered a massive nurse shortage. Similar stories are cropping up across the country. At the beginning of the pandemic, nurses were touted as the heroes of the pandemic. Now that they?ve worked to bring us thru the worst of it, they?re treated as disposable?an attitude that's expediting the exodus of many nurses. Reportedly 20-30% of frontline healthcare workers say they're considering leaving the profession.

It?s important to remember that the hospitals are largely forcing vaccines on their workers out of fear of liability & governmental pressure. But while they will insist these mandates are to keep customers safe, the science doesn?t actually match up. First, nurses have been exposed to COVID more than any other group, & many have built up natural immunity as a result. Secondly, data from the CDC shows vaccinated people can still get & transmit the virus, & that these people carry just as many particles of the virus in nasal passages & their throat as unvaccinated people.

Occupational Licenses and Other Provider Restrictions ========================================== Did you think we were done? Hardly. We?ve barely scratched the surface of all the ways the govt has meddled in the healthcare market & blocked access to affordable care.

Up until the pandemic, states kept a whole hoard of crony regs on the book meant to restrict supply, prevent compe- tition, & keep prices artificially high. While many states have eased the enforcement of these laws since the pandemic began, their presence in the first place has still created barriers to care & the inability for the healthcare market to increase supply to the levels needed to address a crisis.

One of those regulation types is occupational licenses, which litter the healthcare sector more than virtually any other field. Often implemented under the mantle of public health & safety, all occupational licenses really do is ensure people have to pay the state to work. They often include expensive & time-consuming barriers to entry in a field, high fees, & the inability to take one?s skill set across state lines. On top of that, many arbitrarily exclude large numbers of the population from working in a certain field, or prevent people from fully offering the services they're trained in.

For one example, nurse practitioners must complete years of schooling & training. By all metrics they are more than equipped to handle the vast majority of issues that come before a general practitioner. But in most states they are prohibited from seeing patients unless they work under a doctor. Why? Because this prevents them from competing with doctors & keeps prices & doctor salaries high. There?s a massive shortage of GP's in the country, which could be quickly eased by widening the scope of practice for nurse

practitioners?which would also free up the doctors? time for more pressing matters. But cronyism stands as a barrier.

Another example of govt policies that create supply shortages in healthcare are ?ethical clauses? within occupational licenses. In many states people with a record are prohibited from obtaining such a license, permanently blocking them from employment opportunities in numerous fields. This not only prevents millions of Americans from rising, it also means important jobs go unfilled. When you consider all of the petty laws on our books & how easy it is for someone to transgress one of them, you begin to recognize how silly & unjust these laws are.

Lastly, in another example, doctors in Mississippi who wished to make house calls during the pandemic were blocked from doing so. Why? Because state regulators capped the number of licenses for home healthcare services in 1981 under the argument that no more would ever be needed.

Occupational licenses are a dirty scam the public keeps falling for. They aren?t in place to keep you safe (as if the govt even could). They are in place to keep your health- care prices high. And when a pandemic hits, that artificial restriction of supply also means you can?t access the care you need.

Another corrupt govt reg that blocks supply is telehealth restrictions. These regs have impeded care for decades, & the govt has worked hard to ensure existing providers were blocked from the competition telehealth could provide.

Though some of these restrictions were also eased at the beginning of the pandemic, the market can?t create the needed infrastructure to provide these services overnight, & so the industry has been operating from behind the 8-ball.

In conclusion, COVID is a crisis, & it's one we should all be concerned about. But we should also be aware that this is a crisis largely of our own govt?s making.

When we allow the govt 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: to the harm of the many and to the benefit of a privileged few. This isn?t capitalism, it?s cronyism?it?s important people know the difference.

Hannah Cox is the Content Manager and Brand Ambassador for the Foundation for Economic Education.

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