Be Prepared Part Two

Not only did our public health infrastructure have no surge capacity for the pandemic, neither did our health care infrastructure, most notably hospital capacity. That was in fact one of the most publicly visible and damaging facts about the pandemic. Judd Legum explains it here. 

In a pistachio shell, the number of hospital beds in the U.S. has been declining for 45 years, even as the population has increased. Although Legum doesn't emphasize it, this is not entirely bad. In fact some decline was desirable. With better surgical techniques and other advances, many procedures that used to require hospitalization can now be done in outpatient surgical centers without requiring an overnight stay. Length of stay for many conditions has also decreased. To some extent the latter results from financial pressures and it may be that sometimes people would benefit by a longer stay, but it's also true that hospitals are not where you want to be if you can help it. 

However, because the hospital industry is, after all, part of the capitalist system, two trends have happened that are not good for the public. The first is massive consolidation of hospitals into larger and larger chains, both for profit and nonprofit -- which doesn't actually make much difference -- along with so-called vertical integration in which hospitals buy physician practices, other outpatient services, and nursing homes. This eliminates competition, causes prices to rise, and creates an incentive to push services out of the hospital into the other kinds of facilities the same facility owns, where they can be delivered more cheaply. 

 

It also causes them to close down unprofitable facilities, which are mostly in rural areas, and to eliminate bed capacity because of the pressure to make immediate profits. Your quarterly and annual statements aren't going to look good if you have to maintain a lot of what the industry calls "cold sheets." 

But all this means that if demand unexpectedly surges, the supply is not there to meet it. And that's what happened to us. Keeping some capacity mothballed wouldn't actually be very expensive and it wouldn't be that hard to design a way of maintaining it. But don't ask congress to do anything useful these days.