1984 Minnesota law prevents hospitals from increasing bed capacity

In April, Gov. Tim Walz indefinitely granted the commissioner of health the authority to waive the moratorium via an executive order. 

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With the state experiencing record hospitalizations, some readers have asked Alpha News to look into a 1984 Minnesota law that restricts the construction of new hospital beds.

The law in question prohibits the construction of new hospitals and “any erection, building, alteration, reconstruction, modernization, improvement, extension, lease, or other acquisition by or on behalf of a hospital that increases the bed capacity of a hospital, relocates hospital beds from one physical facility, complex, or site to another, or otherwise results in an increase or redistribution of hospital beds within the state.”

In order to build additional beds, hospitals must request permission from the Minnesota Department of Health, which then conducts a “public interest review.”

In passing the law, the Minnesota Legislature was concerned about “overcapacity in hospital licensed beds” and the “cost associated with potentially excessive inpatient capacity,” according to a report from the state’s Health Economics Program.

In other words, lawmakers were worried that, without the law, medical providers would “over-invest in capacity which would drive up prices, raise health care costs, and restrict access to these services for the poor,” Center of the American Experiment economist John Phelan explained back in March.

In April, Gov. Tim Walz indefinitely granted the commissioner of health the authority to waive the moratorium via an executive order.

“It’s impossible to know if we would have been more prepared for coronavirus patients without the Hospital Construction Moratorium, but it certainly didn’t help. It’s time to get rid of this unnecessary and harmful law that artificially restricts our health care supply,” Phelan said in March in a statement published by the Center of the American Experiment.

“It’s taken a global pandemic to realize that many state government regulations are artificial and created for the benefit of special interest groups, not consumers. States are starting to remove barriers to give people more freedom to trade and interact with one another. In Minnesota, the Hospital Construction Moratorium should be the first regulation kicked to the curb,” he added.

Gov. Walz has attributed his new restrictions on public life to the record hospitalizations and ICU admissions reported over the past several days. The issue, however, comes down to a question of staffing, not beds, Walz has claimed.

During a Tuesday press conference, he said the state has the resources to add roughly 400 new ICU beds in 72 hours, but needs to find medical workers to staff them.

According to the University of Minnesota, 1,669 COVID-19 patients were hospitalized as of Wednesday morning, with another 346 in an intensive care unit. The Pioneer Press reported that 91% of HealthPartners’ beds are currently full.