A methodology for projecting hospital bed need: a Michigan case study

Michigan's Department of Community Health (MDCH) is responsible for managing hospitals through the utilization of a Certificate of Need (CON) Commission. Regulation is achieved by limiting the number of beds a hospital can use for inpatient services. MDCH assigns hospitals to service areas and sub areas by use patterns. Hospital beds are then assigned within these Hospital Service Areas and Facility Sub Areas. The determination of the number of hospital beds a facility subarea is authorized to hold, called bed need, is defined in the Michigan Hospital Standards and published by the CON Commission and MDCH. These standards vaguely define a methodology for calculating hospital bed need for a projection year, five years ahead of the base year (defined as the most recent year for which patient data have been published by the Michigan Hospital Association). MDCH approached the authors and requested a reformulation of the process. Here we present a comprehensive guide and associated code as interpreted from the hospital standards with results from the 2011 projection year. Additionally, we discuss methodologies for other states and compare them to Michigan's Bed Need methodology.