News Story

Yes, A Michigan Law Rations Number Of Hospital Beds Here

Now public health experts concerned about hospitals surge capacity

Michigan may be about to undergo a stress test of its capacity to manage the health care needs of patients stricken by the COVID-19 coronavirus. That’s the view of some experts who believe the number of available hospital beds here is artificially constrained by Michigan’s bureaucratic and archaic Certificate of Need program.

Michigan’s CON law requires any proposal to build new medical facilities or add hospital beds to be approved by a state board dominated by already-established hospitals and health care providers.

“In the event of a widespread (coronavirus) outbreak, the nation’s hospitals will become ground zero, absorbing the massive responsibility of treatment and containment,” wrote Lindsay Killen and Naomi Lopez in the March 11 Washington Examiner. Killen is a vice president at the Mackinac Center for Public Policy and Lopez is a policy analyst at the Goldwater Institute.

The authors wrote that in 38 states, the number of hospital beds is limited by CON laws, which give incumbent health care providers veto power over proposals to add capacity or new competitors.

How much of a strain the new virus will place on Michigan’s health care infrastructure depends on the pace and severity of infection. And the facts on the ground appear to be shifting almost hourly.

At a hearing of the state House Health Policy Committee on March 12, Dr. Joneigh Khaldum, chief medical executive at the Michigan Department of Health and Human Services, said there had been no sign so far of “broad community” spread of the coronavirus in Michigan, and only two confirmed cases in the state.

Within 24 hours, though, state emergency services officials announced that the number had grown to 16 cases. Gov. Gretchen Whitmer ordered the closing of all public and private schools until at least April 5 and a ban on all public gatherings of more than 250 people.

On March 15, the number of reported cases in Michigan had grown to 45, and Whitmer said she was considering additional restrictions. There were 65 confirmed cases as of March 17.

Asked at the March 12 hearing by Rep. Angela Witwer, D-Delta Township, whether Michigan hospitals were prepared for an onslaught of coronavirus patients, Khaldum said the question is “on our minds.”

“We’ve asked our hospitals (about) their surge capacity ... their staffing capacity. That is something we are concerned about.” According to the latest report from the state health department about hospital bed capacity, published on March 2, Michigan facilities have 25,375 licensed hospital beds.

A department spokeswoman said the number of currently occupied beds was not available. Of course, not all unoccupied beds are suitable for treating patients suffering from a highly infectious illness. Departmental spokeswoman Lynn Sutfin said a survey of state hospitals, with response rate of 81%, identified 803 total hospital beds in “airborne infection isolation rooms.”

Suftin added that hospital organizations could deploy mobile field hospitals if needed.

But one analysis of CON laws suggests that capacity here is lower than it would be if health care providers were free to make decisions about infrastructure investments without seeking government permission.

According to Matthew Mitchell, a George Mason University economist who spoke to a state Senate committee earlier this year, CON laws have significantly restricted the development of hospital capacity in Michigan. That, in turn, has reduced both the total number of hospitals and the availability of health care outside of urban areas.

“CON laws perform a valuable function for incumbent providers ... by limiting their exposure to new competition,” Mitchell said.