Raising the Bar: ICU Beds and Certificates of Need

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.