OMB debates whether to increase or lessen regs.
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Recent experiences have given the health care industry different approaches it can use to deal more effectively with government regulations.
The private market has been distorted by government regulations and programs; more reliance on market incentives rather than on regulation is needed.
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A year ago HEW published guidelines regulating hospital beds and occupancy rates. Reluctant to close their doors, administrators have sought conversion alternatives, most of them impractical and economically impossible. A go-slow attitude is recommended, as population increases will dictate hospitals' proper response.
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Developing and implementing an effective program to reduce excess hospital capacity is an extremely difficult and complex task. But it is clearly a logical means to contain health care costs and to develope a cost-effective health system.
Seven hospitals that closed between 1974 and 1977 were forced to shut down by a variety of factors. Several of the closings were accomplished in a relatively painless fashion. Others were difficult and created many problems. The individuals involved in the closings and their aftermath learned many lessons, the chief among which is the critical need for communication among all parties involved.