Sunday, August 30, 2020

Vanderbilt can't build Murfreesboro hospital. Government needs to get out of the way and let the market decide.

by Rod Williams, 8/30/2020 - On Wednesday of this week the State government denied Vanderbilt University Medical Center permission to build a 48-bed medical center in Murfreesboro. Instead, the government decided that St. Thomas could build a hospital in Murfreesboro

State law requires the construction of new hospitals to be approved by the Tennessee Health Services and Development Agency. The logic of this is that by requiring government approval, the government will prevent the construction of unnecessary or redundant facilities. Once they decide a hospital can be built, I do not know what criteria they use in choosing one company over another.

This is asinine. I live in the Melrose area of Nashville and we have a Kroger grocery store about a mile from my house. Within about five miles there are several other grocery stores. There is a Aldi's, another Kroger, a Trader Joe's, and others.  I don't want to drive five miles but would welcome another grocery store in my neighborhood.  I am getting one. Within about a half mile, a new Publix is going up. What if a new grocery store had to get a certificate of necessity before they could open and then government, if they decided one could be build, decided which one? I probably would not be getting a new Publix. 

Some will say, "Oh, but health care is different." Why?  Without food you die. Is health care more important than food? 

In the 1970's, the federal government urged states to control the rising health care costs by managing the growth of health care services and facilities through health planning and the Tennessee General Assembly created an agency to manage the Certificate of Need program. How has that worked out?  Are health care cost lower today than they were in 1970?  Is there any reason to believe health care cost would be even higher if we had not had the last fifty years of government making these decisions? 

I am not one who thinks the status quo in health care is just fine.  We need health care reform.  However, wage and price controls almost always fail; requiring government approval before one can open a new business or provide an innovative product or service is more likely to drive prices up, not down; and, bureaucrats picking winners and losers does not result in better decisions than does letting the market make those decisions. 

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