As I suggested in the previous post, in this post I’m going to remark on why we don’t have more reserve capacity in hospital beds. I’m open to other suggestions but I suspect one of the causes is the growth of hospital chains. It’s a pretty common story. A hospital chain acquires local hospitals, consolidates facilities, and reduces the total number of beds to reduce cost and increase occupancy. The number of hospital beds relative to the population has been declining for 40 years or more. That does not seem to have had the effect of reducing costs.
You probably won’t be surprised to learn that three of the states with the lowest number of hospital beds per 1,000 population are California, Oregon, and Washington. New York and Illinois are about in the middle of the pack. More here. I haven’t been able to determine the number of beds per 1,000 population in major cities yet. I’ll keep trying. I suspect we’ll learn that New York City and Los Angeles are in worse shape than Chicago but that’s just an instinct.
Another possible factor is the transition from in-patient to out-patient care. That’s a complicated subject, far beyond the scope of a blog post. Sometimes the distinction isn’t that great. I once went to a hospital for outpatient surgery which unbeknownst to me or my wife was revised to inpatient surgery while I was on the table. When I came to I got out of the bed in which I was recovering and went home, to my surgeon’s horror as I later learned.
As with strategic manufacturing I don’t think that the public at large should be underwriting the risks being taken by large companies. A hospital chain with 15 hospitals, cf. here, whether for profit or nonprofit is a big business—revenues of $1 billion or more. Community capacity requirements should be determined and, while one of these big companies should be free to close or consolidate operations, when the capacity falls below the predetermined requirements, they should be taxed for the privilege, the proceeds to be used to maintain capacity outside those systems. We’re presently learning what some of those capacity requirements are.