What COVID-19 Has Taught Me About Hospitals

The problem we face today can actually be traced back to the early 1960s, when politicians argued and feared that there was explosive growth in the building of hospitals. It was decided that only the state or the federal government could be impartial enough to judge whether a new hospital was truly needed in a community, or whether it was just a grab for revenue by a greedy for-profit enterprise.

I would contend that Certificate of Need laws at the state level, coupled with federal meddling at the national level, was responsible at least in part for the chaos that resulted from COVID – 19.

Read this paragraph from Wikipedia: "The concept of the CON first arose in the field of health care and was passed first in New York in 1964 and then into federal law during the Richard Nixon administration in 1974, with the passage of the National Health Planning and Resources Development Act. Certificates of need are necessary for the construction of medical facilities in 35 states and are issued by state health care agencies:

The certificate-of-need requirement was originally based on state law. New York passed the first certificate-of-need law in 1964, the Metcalf–McCloskey Act. From that time to the passage of Section 1122 of the Social Security Act in 1972, another 18 states passed certificate-of-need legislation.

A number of factors spurred states to require CONs in the health care industry. Chief among these was the concern that the construction of excess hospital capacity would cause competitors in an oversaturated field to cover the costs of a diluted patient pool by overcharging, or by convincing patients to accept hospitalization unnecessarily.

It has been argued in many places that CON laws are responsible (at least in part) for the near panic situation that resulted as the governors of New York, New Jersey, and Connecticut scrambled to obtain enough ventilators for their states. What is clear to me is that government intervention in an area that it is poorly equipped to evaluate and manage is the real culprit in the problem of our health care system.

And what about the excellent article I cited at the beginning of this post? The article —  "Hospital Capacity, Patient Flow, and Emergency Department Use in New Jersey," by Derek Delia, Ph.D., issued in September 2007 — contains this very interesting statement, "The regular occurrence of ED (emergency department) overcrowding raises concern about the hospital sector's ability to respond to a mass casualty event such as a terrorist attack or natural disaster. Overcrowded EDs also create an environment where medical errors are more likely and overall quality of care is below its potential (JCAHO, 2004)."

An examination of the internet for the topic "Emergency Room Overcrowding" shows a vast number of articles laying out the causes of this problem. Often, government meddling is a chief culprit. If you want a copy of any of the reference material, I looked at for this post please email me. In my next piece I am going to lay out a framework for what I feel would be a workable solution for all parties that would improve medical care and incentivize people to pursue careers in medicine.

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Jerry Cohen is a broker in the life, health and Medicare supplement insurance markets. His office is in Port Jefferson Station, New York.