The Covid-19 pandemic has exposed severe shortcomings in hospital financing. Many hospitals in hotspot areas could not provide an adequate supply of hospital beds; yet, even when filled to capacity, a number of hospitals suffered severe revenue losses. In no well-working market should demand exceed supply while revenue falls.
These shortages took place even though the United States spends far more on health care relative to its GDP than other OECD nations. The U.S. has no more beds per capita than the lower-cost health care systems of UK and Canada, about 2.8 hospital beds per 1,000 population, and far less than half of Germany’s.
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