In the 70s and 80s many states had health care Certificate of Need (CON) laws.
In generally, the CON required state approval for the construction or major renovations of hospitals, the construction or major renovation of nursing home beds, and the addition of major technology, such as imaging centers.
The laws varied by state so the generalization did not apply exactly to each state. I believe there may be four (4) states that have retained CON laws (one being Michigan).
When I was young and naïve I believed the CON was based on the formulas built into the law. After some experience I learned that in the states I worked the CON process was rotten with politics, money and influence peddling.
Many states repealed the CON rules because the process did not work, or as a deregulation maneuver.
The market did actually work in one instance, nursing home beds are not being built despite the absence of CON laws, largely because seniors housing and assisted living centers have created a continuum of care that minimizes the need for nursing home beds.
So should we allocate health care capital via the government? What happens to the political losers? Would this slow capital spending, and is that a good thing? How do we keep rotten politics out of the process?