Hospital math and politics

Bracketing off whatever one might think about the coronavirus panic, it is downright terrifying how fragile the health care systems in some of our most poorly managed states have become, and New York in particular.

Consider this: According to Governor Cuomo, New York State has approximately 3,000 ICU beds. In a state with tens of millions of people. Of those 3,000 ICU beds, Cuomo estimates that 80% are already being utilized, mostly by people who have experienced medical catastrophes wholly unrelated to the coronavirus. That leaves 600 beds available to acute coronavirus cases, and he suggests that 20% of coronavirus cases involve hospitalization.

In a way, this is not even a story about the coronavirus. New York State’s health care system could not responsibly handle any major threat to human life with numbers like that. Somehow, in the decades following the September 11th terrorist attacks, the state has become less able to handle catastrophic events, not more. If a major terrorist attack happened today, a lot more people would die.

I’m not totally surprised by numbers like this. I used to work in public policy, doing financial and economic research for a state government. One of my tasks back then was to evaluate new bond issues for the construction of health care facilities across the state. This involved looking at the hospital’s revenue stream and determining whether the hospital could afford to retire the new debt and whether they needed additional capacity. I have no privileged information on the health care industry – this was simple math, trying to determine if the government wanted to attach its name to conduit bond issues for specific medical facilities.

I was surprised as a baby financial analyst back then that hospital capacity levels were a major source of political infighting behind the scenes in government. Many people – particularly people on the political left – did not want hospitals to take on aggressive expansion projects. They thought this would only drive up health care costs as the cost of capital projects is passed on to consumers. The logic goes that if you deny hospitals the ability to expand and keep up with a growing population, you can artificially keep health care costs down.

I watched hospital projects – especially regional hospital projects – get voted down in committee for this reason.

I have approximately zero difficulty imagining this same sort of thing happening in places like New York City, which is now so radicalized politically that they have a Marxist mayor. And now you have a situation where they have a maximum of 600 ICU beds available to a population of millions of people during a pandemic. And that lack of capacity is now a threat to the entire global financial system.

They think this is all Trump’s fault, when the state and local governments have literally managed themselves into ineffectiveness in the provision of essential goods and services.

12 thoughts on “Hospital math and politics

    1. From the beginning of this puke, I figured we’d have a month of highly volatile trading with some very dark days. But I was not anticipating them literally trying to shut down the entire country. I’ve never seen anything like this in my life, and I was working in finance during the financial crisis. I didn’t think this was a big deal until yesterday when they started mandating the closure of businesses in major population centers. This is nuts. I am more worried about the panic and the chasm that exists between politicians and real America than anything. This seems like a powder keg.

      Liked by 2 people

      1. Believe me, I am feeling the same thing. None of us have ever experienced a GLOBAL SHUT DOWN before. It’s very scary, and it is only going to get worse. The only positive i can see coming out of this, is all the Bernie supporters and Socialists out there might finally wake up and realize that this is exactly what to expect and worse under Socialism. I know, it’s a long shot, but …..

        Liked by 1 person

    2. I thought for sure they were going to shut down the markets entirely today when they hit the circuit breaker literally seconds into trading. That stuff did not happen in the financial crisis. Now we are passed the cut off. They’ll let it do whatever it does in the next 20 minutes.

      Liked by 1 person

  1. Your comments don’t surprise me, nor do I doubt what you say, but is there any way to corroborate your assertion that the left undermined new hospital construction?


    1. So I do not mean exclusively the political left, just particularly the political left. This was just a strategy in the state that we recently left for suppressing health care costs artificially.


    2. They made a decision to be unprepared for an aging population because the preparation would lead to health care inflation. As far as quantifying it, I am not sure how to go about doing that. My metric here is the rejection of specific health care expansions and more than that, just creating the perception of an obstacle to expansion so no one would attempt it on a large scale in earnest. There really is no central clearinghouse for that kind of data in the state and local government space. I am just sharing my own personal experience with the assumption, which I do not believe is unfounded in the current panic, that my state was not alone in this behavior. The counterexample would be that there are places with abundant facilities to handle an epidemic, and so far I see none.


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