Legislating Hospital Bed Reduction: The Michigan Experience

Abstract

A variety of programs aimed at health care cost containment have been initiated at the state level. This article presents a case study of one state's effort to deal with health care cost issues, focusing on the formulation of adoption of legislation to reduce the number of hospital beds. The Michigan bed-reduction legislation was the creature of a coalition of powerful, organized "professional consumers" of health services who placed hospital cost containment on the political agenda and framed a solution. The provisions of the legislation were reshaped during the legislative process to grant concessions to a variety of interest groups, particularly the Michigan Hospital Association. Many additional criteria for determining excess bed capacity, some subjective, were added. Cost containment as a goal was, if not subordinated, at least made competitive with other goals--access to care, equity among types of providers, and quality of services. While the initial proposal was attractive as a seemingly simple extension of the certificate-of-need process within the existing regulatory framework, the legislation became increasingly complex in response to new issues raised by political actors who contributed to the shaping of the final version of the legislation. The formulation and adoption of Michigan's overbedding legislation appears to underscore what many other observers have noted: there are no purely technical solutions to health policy problems.

Overlooked Connections: Policy Development and Implementation in State-Local Relations

“…Second, although cost sharing subsumed the old per capita funding formula, it did not incorporate funds supporting a broad range of categorical programs opfour powerful groups with those of the traditional public health community. For a detailed discussion of the bed reduction initiative see Paul-Shaheen and Carpenter (1982) and Carpenter and Paul-Shaheen ( 1984).…”