Roemer’s Law

Roemer’s Law is a healthcare principle that suggests, “A built bed is a filled bed.” Named after Dr. Milton Roemer, a prominent health policy expert, the law argues that the supply of hospital beds will drive demand for their use. In simpler terms, if more hospital beds are available, more patients will be admitted, regardless of whether all those admissions are necessary.

The Origins of Roemer’s Law

Roemer developed this theory after studying healthcare systems in various countries and noticing that hospitals with more beds often had higher occupancy rates. He concluded that healthcare providers, particularly hospitals, are incentivized to fill available beds to maximize revenue, which can sometimes lead to overuse of hospital services and unnecessary admissions.

Impact on Healthcare Costs

Roemer’s Law has significant implications for healthcare costs. As hospitals expand and add more beds, there may be a corresponding rise in healthcare utilization, leading to higher overall spending. This principle is particularly relevant in fee-for-service models, where providers are paid based on the quantity of services they provide, creating financial incentives to admit more patients.

Modern Relevance

In today’s healthcare landscape, with increasing emphasis on value-based care, Roemer’s Law remains relevant. While modern policies aim to control costs and improve patient outcomes, the law serves as a reminder of how the structure of healthcare systems can influence behavior. Understanding Roemer’s Law can help policymakers design more efficient healthcare systems that avoid overuse and promote appropriate care.

Conclusion

Roemer’s Law highlights the risk of healthcare overutilization driven by an oversupply of resources. As healthcare systems evolve, balancing supply with actual need will be key to improving care and controlling costs.

Check out more exclusive coverage with a Huddle+ subscription.

Read personalized, high-quality content that helps healthcare providers lead in digital health, policy, and business. Become a Huddle+ member here.