Raising the Bar: ICU Beds and Certificates of Need

15 Pages Posted: 5 May 2020

See all articles by Matthew D. Mitchell

Matthew D. Mitchell

George Mason University - Mercatus Center

Thomas Stratmann

George Mason University - Buchanan Center Political Economy; George Mason University - Mercatus Center; CESifo (Center for Economic Studies and Ifo Institute)

James B. Bailey

Providence College Department of Economics; Temple University - Department of Economics; Creighton University - Department of Economics

Date Written: April 29, 2020

Abstract

The nation is on a mission to “flatten the curve.” The goal is not so much to reduce the total number of COVID-19 infections — though that would be ideal — but to reduce the number of infections at any one time, so as to ensure that the nation’s healthcare resources are not overwhelmed. While it has received less attention, a secondary goal should be to “raise the bar” by increasing the nation’s capacity to handle those cases that do arise (see figure 1). Certificate-of-need (CON) laws may contribute to diminished healthcare capacity, and their elimination can help raise the bar so that the nation is ready for the next healthcare crisis.

We find that those states that require a CON for hospital beds are more than twice as likely to experience projected ICU bed shortages. On average, these states are expected to experience an ICU bed shortage of about 8,000 beds (about 9 beds per 10,000 residents). By contrast, states that do not require a CON for hospital beds are expected to experience an average shortage of about 114 ICU beds (about 1 bed per 10,000 residents). We also find that the temporary suspension of CON has no statistically significant relationship to ICU bed shortages.

Keywords: healthcare, coronavirus, coronavirus pandemic, COVID-19, public health, economics, quarantine, economy, economic crisis, certificate of need laws, hospital beds, hospital resources

JEL Classification: H51, H75, I00, I13, I18

Suggested Citation

Mitchell, Matthew D. and Stratmann, Thomas and Bailey, James B., Raising the Bar: ICU Beds and Certificates of Need (April 29, 2020). Mercatus Special Edition Policy Brief, Available at SSRN: https://ssrn.com/abstract=3590714 or http://dx.doi.org/10.2139/ssrn.3590714

Matthew D. Mitchell (Contact Author)

George Mason University - Mercatus Center ( email )

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HOME PAGE: http://meractus.org

Thomas Stratmann

George Mason University - Buchanan Center Political Economy ( email )

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George Mason University - Mercatus Center ( email )

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HOME PAGE: http://www.mercatus.org/scholars/thomas-stratmann

CESifo (Center for Economic Studies and Ifo Institute)

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James B. Bailey

Providence College Department of Economics ( email )

1 Cunningham Sq
Providence, RI 02918
United States

HOME PAGE: http://https://economics.providence.edu/faculty-members/james-bailey/

Temple University - Department of Economics ( email )

Philadelphia, PA 19122
United States

HOME PAGE: http://sites.temple.edu/jamesbailey/

Creighton University - Department of Economics ( email )

2500 California Plaza
Omaha, NE 68178
United States

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