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NUMBER OF BEDS <br />FIGURE 2 <br />Community Hospital Beds in Minnesota <br />18,000 17,i i <br />16,000 <br />14,000 <br />12,000 <br />10,000 <br />8,000 <br />6,000 <br />LO <br />(3) <br />O) <br />co <br />MOM <br />O <br />O <br />(.1 <br />11,687 <br />O <br />O <br />N <br />cy <br />O <br />M <br />0 <br />0 <br />cN <br />- <br />O <br />0 <br />Lf) <br />0 <br />0 <br />CN <br />Licensed Beds <br />SOURCE: MDH/HEALTH ECONOMICS PROGRAM ANALYSIS <br />more effective than CON in reducing the growth of <br />hospital beds." It has been successful in this aim. <br />In the twenty years from 1984 through 2004,16 <br />exceptions were granted permitting just 94 addi- <br />tional licensed beds in the state. As Figure 2 shows, <br />between 1996 and 2016, the number of licensed <br />beds in Minnesota actually fell by 921 while the <br />population increased by 810,000. Exactly how <br />"the Minnesota Department of Health has con- <br />cluded that the moratorium is largely ineffective in <br />restraining bed capacity," as Moran says, is some- <br />thing of mystery. <br />By fixing the supply of licensed beds, the mor- <br />atorium makes them valuable commodities. Bed <br />licenses can be held whether they're used or not so <br />a health provider can buy a hospital with 400 beds <br />LO <br />cN <br />O <br />N <br />0 <br />0 <br />co <br />cN <br />O <br />O 0 <br />cy <br />O <br />Available Beds <br />O O <br />LO <br />O <br />(medium sized by Minnesota standards), close it, <br />but still get to keep those licenses. Indeed, those <br />with licenses for beds can shift them around in <br />search of the best return. Moran explains: <br />Many hospitals have strategically "banked" <br />beds, allowing them to circumvent the re- <br />view process. In 2005, while there were only <br />11,650 available beds, there were 16,392 <br />licensed beds in the state, allowing many <br />hospitals to rely on unused bed capacity <br />when they expand services. <br />In 2019, according to Department of Health fig- <br />ures, just 71 percent of beds licensed in Minnesota <br />were actually available. <br />3 • POLICY BRIEFING #004 I MINNESOTA MUST LIFT ITS HOSPITAL MORATORIUM <br />