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I'm Not a Doctor

A second opinion on the challenges and opportunities facing today's physicians.
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By Andis Robeznieks

Blog: 'Roemer's law,' pro and CON

A doctor who died 12 years ago is having an influence on healthcare debates all across the country.

Some 200 bills relating to certificate-of-need laws have been introduced in state legislatures this year. According to Kara Hinkley with the National Conference of State Legislatures, the trend is toward limiting CON by repealing pieces or including moratoriums on CON requirements.

Despite this opposition to the CON process, a new study concluded that certificate of need has done what it set out to do: Control healthcare costs.

CON is a controversial process where, in an effort to keep costs down, healthcare institutions must prove the necessity of a new facility before it can be built. Opponents argue that CON stifles competition and the free-market regulation of costs. Others see CON as a source of corruption, with Illinois being the prime example.

CON gets traced back to Dr. Milton Roemer, a UCLA public health professor, who wrote “hospital beds that are built tend to be used.” This became known as Roemer's law. But not everyone feels it's a law that deserves to be obeyed.

Writing in John Goodman's Health Policy Blog, Heartland Institute senior fellow Greg Scandlen started off a “myth busters” series by attacking Roemer's law.

“Hundreds of laws, massive programs, thousands of regulations at the federal, state and local levels of government, all have been based on this slogan,” Scandlen wrote in July 2011. “Yet this 'law' is both verifiably untrue and illogical.”

But, in its 2008 report, “Tracking the Care of Patients With Severe Chronic Illness (PDF),” researchers with the Dartmouth Atlas of Health Care said Roemer's law still held true.

“The Dartmouth Atlas project has consistently confirmed 'Roemer's law' with data showing a positive association between the per capita supply of staffed hospital beds and the hospitalization rate for most medical (nonsurgical) conditions,” the report stated. “Admissions to intensive-care units are correlated with the supply of ICU beds. Rates of diagnostic testing and imaging exams are correlated with the supply of the equipment that is needed to produce the tests. The relationship between the supply of physicians and physician visit rates, particularly in those specialties focused on treating chronic illnesses, is similar to the relationship between bed supply and hospitalization rates. … Therefore, available capacity governs the frequency of visits.”

The Dartmouth Atlas has its own related law: “In healthcare, geography is destiny.” And this gets us to the source of the most recent study on the subject.

Researchers with the Michigan State University geography department have concluded that there's compelling evidence that a relationship exists between hospital bed availability and hospitalization rates. “This study provides evidence for the effects of Roemer's law, thus suggesting that variations in hospitalization rates have origins in the availability of hospital beds,” the MSU researchers wrote. “These findings suggest continued regulation of hospital bed supply to assist in controlling hospital utilization is justified.”

The report appears in PLOS One, the journal of the Public Library of Science. The researchers map out an equation showing how utilization is affected by the population total; as well as the need for service, the general health and socio-economic status of the population; low-variation hospital rates (for conditions where there is little doubt hospitalization is required); ambulatory-care sensitive hospitalizations; and various other factors including mobility as defined by means of transportation and average travel time to work.

The study's first citation notes the source of Roemer's law: the April 1959 edition of Modern Hospital, the publication purchased by Crain Communications in 1976 and renamed Modern Healthcare.

In a report co-written with Max Shain (PDF), a Cornell University assistant hospital administration professor, Roemer examined reasons behind hospital utilization. It included a warning to be wary of folks who throw numbers around: “All of us are suspicious of the statistical wizards who can demonstrate mathematically that the price of beans in Chile is related to the baseball scores in Yankee Stadium.”

Many of the arguments and conclusions sounded familiar.

“We shall have to decide what proportion of our resources is to be devoted to hospital and medical care, in competition with the demands for aircraft carriers and rockets, schools and roads, houses and automobiles, cigarettes and television,” Roemer and Shain wrote. “This is the kind of decision that calls for the concerted attention of all elements of our society; far more than doctors and hospital administrators are concerned.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks.

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