Institutional Law and Economics: The Legal-Economic Nexus

Last week, we discussed the issue of hospital beds and hospital bed capacity.  This has been at the heart of the debate over the Covid-19 restrictions and the need to flatten the infection curve to avoid overwhelming the capacity of hospitals.  Based on 2015 data from the Centers for Disease Control, the US and approximately 900,000 hospital beds across 5,500 hospitals.  Two-thirds of these hospitals are under 200 beds on average. Hospital beds are a rather strange economic good because of the separation of user and payer in most cases in the United States and in many countries.  The user of a hospital bed, the patient, is the consumer of the good.  The payer and the buyer of the good is typically a public or private insurance company expect in the cause of an uninsured individual.  This group includes private insurance companies such as Aetna, Kaiser or Blue Cross.  It also includes public insurance such as Medicare and Medicaid and some local gove...

Hospital Beds as an Economic Good The building and maintenance of hospital beds is a difficult economic proposition.  Each hospital must decide within the market rules are designed by each state in the United States, how many beds make sense for that facility. Hospital beds are expensive to maintain and represent a high fixed cost.  Much of the costs of a hospital bed must be incurred regardless of actual capacity (Green, 2002) [1] .  An empty bed loses money and is not available to help cover fixed costs. Planet Money Show and Hospital Beds National Public Radio’s (NPR) show “Planet Money” recently had story about the issue of hospital bed economics.   https://www.npr.org/sections/money/ They cite during the show Prof. Zack Cooper from the Yale School of Public Health who talks about the efficiency and inefficiency of hospital beds.  Cooper states in the piece that, “If there are beds, those beds would have gotten used...

This week, given the extreme circumstances surrounding the recent COVID-19 pandemic, we are once again deviating from our usual ILE content and leaning on the expertise of our in-house law fellow, Samantha Zinnes , to talk about the challenges local government has in dealing with the crisis. This brief interview was conducted via zoom on March 30 th , 2020. Relating to the law and this COVID-19 crisis, what can you say about the federal and local response? SZ: The problem right now is not necessarily that the law is flawed, but that we have a distribution of leaders who are unevenly using the law and the tools it gives them to their fullest potential.   We have a federal government with tools that only the federal government can use, but they are not being implemented the way states and local governments want or need them to be.   So the fact that we have multiple levels of government is a double-edged sword.   The states check the federal government by only al...

This week, given the extreme circumstances surrounding the recent COVID-19 pandemic, we're deviating from our usual ILE content and leaning on the expertise of our in-house law fellow, Samantha Zinnes , to talk about the power local government has in dealing with this type of situation.   The Power of Michigan Local Health Officials to Combat a Pandemic Disease By Samantha Zinnes, Esq. Early last week, Governor Gretchen Whitmer declared a state of emergency as the first confirmed cases of COVID-19, an illness caused by coronavirus, were reported in Michigan. At the same time, the World Health Organization (WHO) officially declared this coronavirus a pandemic. A disease that is a pandemic or epidemic does not necessarily refer to the severity of the actual disease or the complications it causes. Rather, it more has to do with where, when, and how the disease has spread. An epidemic is defined as a clear increase in the normal amount of cases occurring in a commun...