A VIRUS CAN MUTATE FAR FASTER THAN A CARTEL MANAGER CAN ISSUE AUTHORITY.

During the recent outbreak of the Delta variant of the coronavirus, it's the intake of critically ill people in intensive care wards, particularly in sparsely settled areas, that is influencing the tightening of gubernatorial ukases lately.  At first blush, that reaction to that situation might make sense:  hospitals don't want expensive facilities sitting idle, which means that under normal circumstances, intensive care beds and wards are on average pretty full, as there's accumulated experience suggesting what the intake will be, and it's difficult to encourage staff to generate business for an idle intensive care bed (I have private information that such rainmaking activity involving more mundane procedures is not unknown among dentists, physicians, and surgeons.)  Thus when a new respiratory virus comes along, there might be more patients who could benefit from intensive care than there are beds, at least until people stop taking the other sorts of risks that might get them badly hurt.

But the installation of an intensive care ward in a hospital is not a strictly private decision.

An insufficient supply of ICU beds is one of the acute crisis points of the pandemic. When hospitals run out of room to treat patients who need the most help, doctors and hospital administrators must make difficult triage decisions. This affects not just COVID patients but anyone else who might be in urgent need of medical care—car crash victims or those who've had heart attacks—and it almost certainly means that some people will die who otherwise may have survived.

It's a crisis that has been made worse by outdated and ineffective government regulations—known as "Certificate of Need" (CON) laws—that actually& reduce the number of available hospital beds by requiring that hospitals get permission from the state before adding capacity.

That "reduce" might be excessive: at least on a chalkboard we can achieve Platonic perfection in the issuance of permits, which is to say, trade tested betterments would do no better.  Reality generally falls short of Platonic perfection, let alone of Pareto optimality.  There are certificate of need regulations in place in Illinois, and those might have had the cosmetic effect of bending the cost curve down by limiting the construction of intensive care units, particularly downstate, but with the consequence of severe capacity constraints during the coronavirus outbreaks.

It could be worse.

That is the situation in Mississippi, which in 1981 enacted a law that arbitrarily and permanently capped the number of licenses for home health agencies, businesses that arrange for nurses and other medical professionals to make house calls. For 40 years, the only way to legally launch a new home health agency in the state has been to purchase a certificate of need (CON) license from an existing agency—an arrangement that guarantees incumbent businesses won't face new competition.

This was a bad way to run a health care market before 2020. Now it looks like a disaster.

Why the New York taxi medallion model would be attractive to health policy boffins escapes me.  And, alas, it's a lot harder to make the case that a spare bedroom might work as an intensive care unit on the Air B&B model, the way a ride-share car serves as a work-around to the taxi cartel.

So it always is with cartels, and with the Democrats holding sway on health policy in Washington and in a number of the thickly settled states, it's likely that they'll continue to restrict expansion of health services because They. Know. Better, and because that will generate rents for preferred constituents.