Oregon Needs More Hospital Beds and Less Regulation

By Micah Perry

Tired of wearing a mask? You’re not alone. In August, Governor Brown reinstated mask mandates in an effort to prevent Oregon’s hospitals from running out of beds. While the Delta variant is an easy scapegoat for this near catastrophe, the state’s outdated certificate-of-need laws have prevented healthcare providers from expanding capacity for decades.

When a healthcare provider in Oregon wants to build a new hospital or expand certain services, the provider must undergo a lengthy review process to prove that there is a “need” for the new facility. During the review, competing hospitals can step in and claim the facility is not needed in a community. In essence, existing providers can have veto power over a new entrant. Predictably, they often do this to protect themselves from competition.

The state asserts that certificate-of-need programs prevent “unnecessary investment in unneeded facilities and services.” In reality, the law has given us a shortage of much-needed hospital beds and mental health services. Because of these laws, it’s no accident that Oregon has the lowest number of hospital beds per capita in the nation.

Throughout the pandemic, many of the state’s heavy-handed mandates have been in response to concerns over the state’s low hospital capacity, but this is a self-inflicted wound. The government and competing providers are the wrong people to ask whether we need more healthcare facilities. It’s time to pull the plug on Oregon’s certificate of need law.

Micah Perry is a Program Assistant for External Affairs at Cascade Policy Institute, Oregon’s free market public policy research organization.

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