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Monday, August 13, 2007
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Things That Confuse Me

Opening a new hospital is bad because it increases health care costs:

The phenomenon was noted more than 40 years ago: Hospital beds, once built, will be used.

The Milwaukee area is about to find out whether that phenomenon, known as Roemer's Law, still holds true.

Last month, Aurora Health Care announced plans to build a hospital in Grafton in southern Ozaukee County. The announcement came about one year after it won approval to build a hospital in western Waukesha County.
...
"Somebody is going to have to pay for this," said Dorothy Hagemeier, an assistant professor at Columbia College of Nursing. "And it's going to be businesses that pay for health care for their employees. And it's going to be employees who have to pay for health care."

Forget that competition in markets serve to drive down costs in order to attract customers.  Hospitals that can't compete because their costs are too high, or their services are inferior, are forced to close.  But of course, when that happens that's bad too:

St. Michael Hospital will cease to operate as a freestanding hospital starting next month was, sad to say, inevitable. But given the poor patients whom St. Michael has served, the closing of its emergency department and inpatient services is both a sign of the times and a symptom of a health care system that desperately needs major surgery.
...
But in recent years, St. Michael has seen its average inpatient census decline sharply. Just a few years ago, the average number of inpatient beds was 76; today, it's 44.
...
Wheaton officials hope that their flagship Milwaukee hospital, St. Joseph, will be able to pick up much of the slack from St. Michael. But until something is done on a much larger scale to remedy America's dysfunctional health care system, we fear St. Michael won't be the last hospital to close.

Hold on a second?  They had empty beds?  But what about Roemer's Law that beds, once built, will be used?!  Shouldn't St. Michael's closing have been celebrated by the Journal as a way to keep health care costs down?  After all, if building hospitals increases costs, then sure closing them down will decrease costs.

Right?

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