Hospital Capacity Shortages: An SEC-Backed Transparency “PULL” Will Open Beds Faster Than a “PUSH” by HHS

In the new normal of ongoing pandemics, hospital bed shortages will continue. Healthcare innovation expert and author of the upcoming book Innovating in Healthcare: Creating Breakthrough Services, Products, and Business Models (Wiley, 2023, 978-1119543008), HBS Professor Regina Herzlinger says what we really have is more an access problem than a capacity one. Independent hospitals urgently need “surge plans” that form shared resource networks. “In many cases, there were other hospitals in the same system that had plenty of available space. Those hospitals could have—and should have—accommodated the surge of patients.” Yet the hospitals that were full couldn’t send patients to the other less busy hospitals for two reasons. One was a lack of transparency; they simply didn’t know there was space at other hospitals. The second was a lack of formal “surge plans” among neighboring hospitals.
Herzlinger’s idea is to have the SEC to require hospitals to publicize their “surge” plans in a standard developed by its accounting arm, the FASB, in their required financial filings. This transparency, which will be analyzed and publicized by financial journalists, enables patients and investors to reward or penalize hospitals based on the quality of their surge plan compared to other similar hospitals. The transparency of their plans thus drives competition and innovation at the grassroots level and incentivizes hospitals to quickly take action