Roemer’s Law

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Roemer’s Law is a widely cited principle in health care policy and at its simplest states that hospital beds that exist tend to be used. Usually such usage is seen as wasteful. However western inpatient health care is associated with better health outcomes in a range of conditions. For example studies have shown a weak relationship with low acute bed numbers and excess winter mortality so ability to access acute hospitalisation is beneficial for some emergency inpatients[1] and a balance exists. The opposite implication is that limiting the bed base available to clinicians will decrease bed utilisation. This is also true but in its time has lead to plenty of health care delivery scandals when demand has outstripped provision, or where alternative community services have not provided effective healthcare.


Roemer’s Law resulted from the observation of Roemer in 1959[2]that there is a correlation between the number of hospital beds per person and the rate of hospital days used per person. The law is thought to be a consequence of induced demand. As applied to an insurance based health system it might read "in an insured population, a hospital bed built is a filled bed". However the relationship is not consistent and varies between health systems and different populations. For example rural populations have higher bed day demand that urban in an Canadian study[3]. And in the USA hospital utilisation falls off markedly for travel times over 30 minutes to be effectively nil at 150 minutes[4]. And the variation in other components of the social/health system can be more important[5]. Indeed it would be expected that the change in the English system from block contracts to tariff based contracts on admissions would induce demand which then needed regulation to reduce the incentive to increase hospital activity. So it proved. In USA Medicare participants in 1989 it was estimated that an increase of 10 percent in hospital bed per capita would increase hospital utilization by Medicare enrollees by about 4 percent[6]. As of 2013 Roemer's Law is validated in the USA[4], and socialised health systems based on bulk contract such as in New Zealand[7]. The mixed system inherited on German re-unification has some interesting lessons. For example the greater adaptability of for-profits suppliers helps when capacity needs to be increased but they also tend to expand in markets with decreasing demand unlike public and nonprofit owned hospitals and can be therefore socially wasteful.[8]

References

  1. Healy JD. Excess winter mortality in Europe: a cross country analysis identifying key risk factors. Journal of epidemiology and community health. 2003 Oct; 57(10):784-789.(Print) (Link to article – subscription may be required.)
  2. SHAIN M, ROEMER MI. Hospital costs relate to the supply of beds. Modern hospital. 1959 Apr; 92(4):71-3 passim.
  3. Bay KS, Long MJ, Ross Kerr JC. Utilization of hospital services by the elderly: geriatric crisis in one Canadian single payer system. Health services management research : an official journal of the Association of University Programs in Health Administration / HSMC, AUPHA. 1997 Feb; 10(1):42-57.
  4. a b Delamater PL, Messina JP, Grady SC, WinklerPrins V, Shortridge AM. Do more hospital beds lead to higher hospitalization rates? a spatial examination of Roemer's Law. PloS one. 2013; 8(2):e54900.(Link to article – subscription may be required.)
  5. Fusco D, Saitto C, Arcà M, Ancona C, Perucci CA. Cyclic fluctuations in hospital bed occupancy in Roma (Italy): supply or demand driven? Health services management research : an official journal of the Association of University Programs in Health Administration / HSMC, AUPHA. 2003 Nov; 16(4):268-75.(Link to article – subscription may be required.)
  6. Ginsburg PB, Koretz DM. Bed availability and hospital utilization: estimates of the "Roemer effect". Health care financing review. 1983; 5(1):87-92.
  7. Brown LJ, Barnett JR. Influence of bed supply and health care organization on regional and local patterns of diabetes related hospitalization. Social science & medicine (1982). 1992 Nov; 35(9):1157-70.
  8. Schwierz C. Expansion in markets with decreasing demand-for-profits in the German hospital industry. Health economics. 2011 Jun; 20(6):675-87.(Link to article – subscription may be required.)