ICU beds are in short supply in many states as the delta variant of the SARS-CoV-2 virus makes its way through the country. Alabama has reportedly run out of ICU beds, while states such as Georgia, Florida, and Kentucky have occupancy rates over 90%. While extreme events like pandemics will always stress hospital resources, regulations that restrict new supply, such as certificate of need, or CON, regulations exacerbate the problem and lead to more deaths.
CON regulations are state rules that require health care providers to get permission from government regulators before expanding facilities or offering new services. These regulations also allow existing operators to object to proposed new facilities or service offerings, meaning incumbents can stifle new competition.
Currently 39 states and Washington, D.C. have some type of CON regulation. The number of services covered by CON rules varies, from a high of 28 in Hawaii to only one in New Mexico.
Research shows that CON regulations restrict access to care and increase costs. In one particularly relevant study, economists Thomas Stratmann and Jake Russ found that a state CON program is associated with 99 fewer hospital beds per 100,000 people. States that specifically regulate acute care hospital beds, such as Alabama, have on average 131 fewer beds per 100,000 people.
Alabama has a population of 4.9 million, so its CON regulations may be costing the state more than 6,400 beds—beds Alabama’s residents probably wish they had now. Fewer beds mean some people will not get the care they need and will experience worse outcomes—even death—as a result.
In fact, a new study finds that CON regulations led to more deaths. In the 1960s and 70s there were medical advances in the treatment of heart attacks, such as better pacemakers, coronary angioplasty, and separate coronary care units equipped with heart monitors. These new technologies improved outcomes for heart attack patients, but only if hospitals installed them.
Since CON regulations hinder new investment and hospital expansion, it is plausible that they delayed the implementation of these new technologies for treating heart attacks. Economist Kevin Chiu analyzed heart attack mortality data from 1968 to 1982 to estimate the impact CON regulations had on deaths related to heart attacks. He finds that border counties in states with CON regulations had 14 more deaths per 100,000 people than similar counties in non-CON states in the three years after adopting CON regulations. CON regulations cost lives.
Many state regulators know that CON regulations erect barriers to care. This is why early in the pandemic, 18 states suspended their CON regulations to give hospitals more flexibility to deliver needed care. Since then, Montana and Tennessee permanently repealed many of their CON regulations.
More states should follow Montana and Tennessee and make their temporary CON suspensions permanent, while continuing to chip away at other regulations that impede new health care investments and innovation. People’s lives depend on it.