New Vanderbilt expansion price tag caused by over-regulation

[Kheldane]

I'm excited about the expansion of the Vanderbilt Medical facilities, but.....$234 Million for only 141 Beds!!! That's close to $2,000,000 per bed. It's not hard to see why the cost of healthcare is escalating through the roof. Vanderbilt, and no other healthcare provider for that matter, sees any real need to control costs. It's enough to make me sick!

I think that price your seeing is the *result* of their efforts to control costs. I just turns out that hospitals are some of the most expensive buildings to build. Just be glad nashville has plenty of migrant mexican labor or your would really see an astronomical price tag!

Things contributing to the unusually high price:

>Federal Government tarrifs on foreign timber, steel, and concrete

>Federal Government patents on medical equipment and other equipment

>Federal Government restrictions on migrant labor

>State Government liscensing for architects and engineers

>State & Local Government building codes

In the absence of these and other regulations, the building itself would undoubtedly be cheaper. Of course, the overall cost of healthcare is driven by a host of other things besides hospital building cost, but I think you get the point. I'm sure VUMC is doing the best they can to limit costs within the context of inefficient socialist regulations at all levels of government.

[Hankster]

In the absence of these and other regulations, the building itself would undoubtedly be cheaper. Of course, the overall cost of healthcare is driven by a host of other things besides hospital building cost, but I think you get the point. I'm sure VUMC is doing the best they can to limit costs within the context of inefficient socialist regulations at all levels of government.

How much cheaper would it be? 20%?, maybe even 30%? Big deal! That would still result in a hospital costing over $1,000,000 per bed. I blame the entire medical profession, and our reliance on insurance payments to pay for higher and higher bills for this much, much more than the Federal Government regulations. By the way, the U.S. has the lowest tariff charges of any country in the world, and we have the lowest consumer prices of any coutry in the world. We are "under-regulated" when compared to the rest of the world. That's still not to say that I'd like to see regulations reduced.

[tistic]

Things contributing to the unusually high price: (...)

>Federal Government patents on medical equipment and other equipment (...)

I'm sure VUMC is doing the best they can to limit costs within the context of inefficient socialist regulations at all levels of government.

Gotta weigh in on this one, Kheldane. While I thoroughly appreciate your points attacking socialist regulatoins, the US Patent system doesn't belong in that list. Virtually every major technological advancement our economy enjoys depends upon it. It is a social bargain between the private sector, which thrives on it, and the federal government which grants it. But since the government derives its authority for granting patents from our Constitution, Article I Section 8 (8), I'd say it isn't socialist.

Inventors who disclose their inventions get a term-limited monopoly for sharing information about their discovery after their patent is granted. If it isn't granted, they don't have to disclose their trade secret. But if it is granted, others are free to build upon the achievement. The technology that will go into the new VUMC building will be expensive, but I'd say it's worth it b/c without it we'd need smaller hospitals and larger morgues...

[MidTenn1]

Things contributing to the unusually high price:

>State Government liscensing for architects and engineers

In the absence of these and other regulations, the building itself would undoubtedly be cheaper.

Actually, the license only costs about $150 every two years to renew. There is a professional privilege tax and some continuing education required. But the costs are still insignificant compared to the total cost of a structure or system.

The Rules and Regulations require an appropriate and well defined amount of education from an accredited University, and the passing of a rigorous fundamentals test, which less than half those who take it actually pass. Then, after all that, once you have had 5 years of meaningful experience, you get to take another rigorous test concentrating largely in your chosen field of engineering or architecture, providing you also get good recommendations from several licensed engineers. It is a tough process, but those who survive become Professional Engineers (PE), including yours truly.

The regulations are in place to protect the safety of the public from incompetent and criminal engineers or uneducated people who claim to be engineers. The rules and regulations are created, implemented and enforced by the various boards which are made up of members of the various professional communities. They do so under the umbrella of the 'Government' which funds the operation of and legally legitimizes the decisions of the board. Without these and other professional regulations, you could have any high school dropout designing the bridges you drive over or the airplanes you fly on. Or even have your Chiropractor performing by-pass surgery.

This is not socialism, but an example of government of, by and for the people, that actually works.

[MidTenn1]

Things contributing to the unusually high price:

>State & Local Government building codes

In the absence of these and other regulations, the building itself would undoubtedly be cheaper. Of course, the overall cost of healthcare is driven by a host of other things besides hospital building cost, but I think you get the point. I'm sure VUMC is doing the best they can to limit costs within the context of inefficient socialist regulations at all levels of government.

Catching my second wind here.

Which building codes are you talking about? The ones that keep the building from falling down or the ones that keep it from burning up?

Perhaps the codes that require access for people with disabilities? I believe hospitals might have a few disabled customers.

I also agree that there can be too much Government in our lives, especially where it concerns what I do with my computer, my private phone calls and how and where we use our reproductive systems. But, I for one, am glad the professionals who create these codes with great input and feedback from the industries, citizens and professionals directly impacted, are doing what they are doing.

[Kheldane]

How much cheaper would it be? 20%?, maybe even 30%? Big deal! That would still result in a hospital costing over $1,000,000 per bed. I blame the entire medical profession, and our reliance on insurance payments to pay for higher and higher bills for this much, much more than the Federal Government regulations. By the way, the U.S. has the lowest tariff charges of any country in the world, and we have the lowest consumer prices of any coutry in the world. We are "under-regulated" when compared to the rest of the world. That's still not to say that I'd like to see regulations reduced.

It's hard to say exactly what dollar amount of the building cost is due to government regulation. But I really don's see how you can blame insurance companies for the cost of the hospital building itself....

That cost is driven by the cost of raw materials, labor, design, and of course, regulatory costs.

As for the US tariff system - any restriction on free trade is over-regulation! What the rest of the world is doing is completely irrelevent. The other governments throughout the world (except maybe for hong kong and dubai - those places have way lower tariffs) are idiotic socialist governments. But you do make a good point - the US gov is less socialist than most. But that point in no way invalidates my point that those socialist regulations that *do* exist here contribute to higher building costs.

[Kheldane]

Gotta weigh in on this one, Kheldane. While I thoroughly appreciate your points attacking socialist regulatoins, the US Patent system doesn't belong in that list. Virtually every major technological advancement our economy enjoys depends upon it. It is a social bargain between the private sector, which thrives on it, and the federal government which grants it. But since the government derives its authority for granting patents from our Constitution, Article I Section 8 (8), I'd say it isn't socialist.

Inventors who disclose their inventions get a term-limited monopoly for sharing information about their discovery after their patent is granted. If it isn't granted, they don't have to disclose their trade secret. But if it is granted, others are free to build upon the achievement. The technology that will go into the new VUMC building will be expensive, but I'd say it's worth it b/c without it we'd need smaller hospitals and larger morgues...

Of course we could spend a whole thread discussing the merits/demerits and economic consequences of the patent system. But I don't think this is the place for that.

But, you are *wrong* to say that patents don't belong in my list. They do contribute to the cost of the building, and they are socialist. Socialist laws direct the use of capital assets in a direction than they otherwise would have gone in the economy. You said it yourself: patents grant a little monopoly to the producer - which means the producer can charge a higher price. That patents allow producers to charge higher prices is a foregone conclusion - otherwise why have patents? Therefore, the patent law obligates the consumer to spend more money for product XXX than he otherwise would have in the free market. Socialist. End of story.

As for the constitution - that document is flawed in many ways and it certainly provides no guidance in determining what is and is not socialist. Remember how it took an amendment to clarify that slavery was illegal? The constitution is still about 50 amendments short of granting americans the freedoms they deserve.

[Kheldane]

Actually, the license only costs about $150 every two years to renew. There is a professional privilege tax and some continuing education required. But the costs are still insignificant compared to the total cost of a structure or system.....

The Rules and Regulations require an appropriate and well defined amount of education from an accredited University, and the passing of a rigorous fundamentals test.....

The regulations are in place to protect the safety of the public from incompetent and criminal engineers or uneducated people who claim to be engineers. ....

This is not socialism, but an example of government of, by and for the people, that actually works.

Catching my second wind here....Which building codes are you talking about? The ones that keep the building from falling down or the ones that keep it from burning up?

Perhaps the codes that require access for people with disabilities? I believe hospitals might have a few disabled customers.

Hey PHofKS! You've given me a lot to work with - and for that: I thank you!

I wasn't talking about the cost of the architect/engineer liscense - I was talking about the monopoly prices that engineers/archictects are able to charge since it has been made illegal for unliscensed architects to practice their trade.

I reject your assertion that only people who graduate from XXX university and pass XXX test should have the right to design buildings. That law is socialist because if I am a builder and I want to employ Joe Schmoe to design my building - the state has made it illegal. I will then be forced to pay more money for some "liscensed" architect who I think is an idiot and a looser - but just because they passed some state exam they are considered competent by the state government. Thus - my money has been re-directed by the state in a different direction - socialism. Plain and simple. And as for the state's ability to deside who is competent - HA! Double HA! The state government itself is incompetent, so any seal of approval that they bestow on anything is meaningless and only worthy of derision.

I say that people who want a building built will find a way to determine for themselves who is capable of designing it. It may be that the same panel of experts who designed the liscensing exams and requirements deside to form their own private liscensing organization - and a developer relies on their recommendation about who is a good architect. But it should not be a legal requirement.

I'm sure the people financing buildings and the people insuring buildings would have something to say about low quality architecture - there is plenty of financial incentive in the free market for buildings to be well designed and engineered - they need no encouragement from the government to build a building that is safe and will last. It is already in their financial interest to do so. If I want to bring in an architect from Malaysia to design my building - and he happens to not be liscensed in TN or anywhere in the US - does that make him incapable of designing my building? Do his designs need to be reviewed by a "liscensed" architect? By no means!

As for building codes/fire codes/disability ramps: I've already mentioned the interested parties who will see to it that a new building is safe. You can't get insurance if your building is a fire trap - and you can't get financing for a building if you can't get insurance. And don't you think VUMC would be more than willing to make sure their customers could get into their new hospital? Do you really need a law on the books for VUMC to make their hospitals wheel chair accessable????????

As for your statement about the regulations not being socialist, but "By the people...", I think you're confusing economic system with political system. I'm fully aware that the laws we have came about as a result of the democratic process. But that in no way changes the economic reality that they are socialist in nature and intent. Most americans are socialist - although they don't think of it that way since the term "socialist" has somehow come to mean un-patriotic or un-american to some people.

[nashvol85]

^^

wow. Just plain wow.

Correct me if I'm wrong but from what I take it you are extremely economically conservative and very libertarian...?

As for the new Medical Center tower, are there any renderings out or is it just a bid based on size? The Vanderbilt area is becoming it's own small skyline of 10 story monsterous buildings that dominate that part of town. Very dense and urban. I'd love to see a rendering if/when one becomes avaliable.

[rocky top buzz]

A large part of the proble, which you claim as a benefit, is the illegal immigration. If we didn't have laborers doing work at $2 an hour that others would do at $10 an hour, than wages would be rising to keep up with increased health costs.

Pure Economics my friends. And the illegal immigrants come screw that up and send $40 billion to Mexico that could be $160 billion kept here at home.

[bnaflyer]

I think that price your seeing is the *result* of their efforts to control costs. I just turns out that hospitals are some of the most expensive buildings to build. Just be glad nashville has plenty of migrant mexican labor or your would really see an astronomical price tag!

Things contributing to the unusually high price:

>State Government liscensing for architects and engineers

>State & Local Government building codes

Yes, if only the state and local government would stop enacting pesky building codes! Those old sick people don't need a fire escape anyway! And who cares if the structural engineer calculating the loads of a 11 story building isn't qualified? After all, if the building collapses the free market will take care of it.

Really, not to put too fine a point on it, but that is just about the silliest argument I've seen in a while.

[bnaflyer]

As for building codes/fire codes/disability ramps: I've already mentioned the interested parties who will see to it that a new building is safe. You can't get insurance if your building is a fire trap - and you can't get financing for a building if you can't get insurance. And don't you think VUMC would be more than willing to make sure their customers could get into their new hospital? Do you really need a law on the books for VUMC to make their hospitals wheel chair accessable????????

You obviously dont' know much about the history of building codes in America. In fact, "interested parties" did not make sure new buildings were safe. "Interested parties" built buildings that were so unsafe that little children and old people hurled themselves out of the windows when they caught on fire. The sight of this wonderful free market solution led to modern building codes. To view building codes as some sort of "socialist" restriction on freedom is just preposterous and really demonstrates a naive understanding of human nature. Maybe you should do some reading about the development of building codes and some of the historical examples of what happened in this country when we didn't have building codes and four or five families lived together in one room without running water.... I mean, really, sometimes I am just astonished at this kind of antigovernment claptrap. It would seem that one thing liberals and conservatives alike should be able to agree on is the basic need for government to perform certain core functions, which surely would include the licensing of professionals and ensuring public safety....

[bnaflyer]

But, you are *wrong* to say that patents don't belong in my list. They do contribute to the cost of the building, and they are socialist. Socialist laws direct the use of capital assets in a direction than they otherwise would have gone in the economy. You said it yourself: patents grant a little monopoly to the producer - which means the producer can charge a higher price. That patents allow producers to charge higher prices is a foregone conclusion - otherwise why have patents? Therefore, the patent law obligates the consumer to spend more money for product XXX than he otherwise would have in the free market. Socialist. End of story.

okay I promise, this is my last response to these increasingly silly arguments, which are veering off point for urbanplanet anyway.

You don't understand patent law. Patent law protectsthe ownership of property--intellectual property in this case. The patent laws are no different from the laws that prevent someone from coming and taking your car and driving off in it. Would that be "socialist"? If you believe that anyone should have the right to steal my invention and sell it to other people, that is not a "free market" approach. The only countries that follow that kind of approach are generally communist or totalitarian states, and even they usually pay lipservice to intellectual property rights. Intellectual property rights, as someone else has pointed out, long predate the invention of "socialism." (You do understand that socialism derives from the 19th Century, right? ) So to call these important laws that protect property rights "socialist" is just flat out nonsensical and wrong.

[samsonh]

It would seem that one thing liberals and conservatives alike should be able to agree on is the basic need for government to perform certain core functions, which surely would include the licensing of professionals and ensuring public safety....

But my problem BNA is how far do we allow the government into our lives? Government intervention makes things more expensive. This is a fact. The certificate of need process makes health care more expensive by reducing competition. This proposal will most likely be opposed by HCA and Ascension, Vanderbilt's main competitors, because it will lower the quality of health care locally and increase the cost. This is an absurd argument and one that will be believed without second thought by many, thats a scary thought if you ask me. Kheldane's arguments are not silly, he may be exagerrating the effect of government inntervention but I suggest you give serious thought to what he is trying to say.

I have a serious question. If I wish to form an LLC in the state of TN I must pay in the neighborhood of $350-$3000 depending on the ownership makeup. Add to this that I must pay the Franchise and Excise tax. What service do I receive from the state government for paying these taxes? Similarlly by creating professional license requirements what service is the State of TN providing me as a professional, be it a doctor, engineer, or insurance salesman?

How far is the government willing to go to protect me from myself? Who determines what is a social good? Why are my tax dollars being spent to put up a tower for Tony Giarratana downtown? Who has decided that "affordable" housing is something that I should be responsible for? I honestly do not care if people cannot afford to live downtown. If someone chooses a profession which does not compensate him enough to live downtown then he can live elsewhere or choose a new profession. Why has the government decided that we need to grant Nissan $200 million in incentives? This shortsighted decision will create a less competitive business environment over time and actually lead to fewer jobs in Middle Tennessee.

Have you ever given thought to why health care is so expensive? Furthermore have you considered the reasons that so many are unisured in TN? Perhaps if we did not burden the businesses and consumers of Middle TN with so many taxes to pay for things such as TennCare, the war in Iraq, and huge entitlements such as SS and Medicare, we would have a more efficient economy that placed its scarce resources to work in ways that allowed economic growth which would in turn decrease those societal problems we are trying to fix. I have no doubt that until the day I die government will be attempting to fix these very same problems with solutions that have never and will never solve anything.

Kheldane, PLEASE POST MORE.

[smeagolsfree]

Well why does the majority of the international community have patent laws? Just suppose you invent a new gadget and you have put your entire life into it and some socialist /communist jerk steals the idea and makes millions off it leaving you in the poor house. I guess he wouldn't be a socialist/communist for one , but patent laws are needed. It really amazes me how a thread on a new hospital always turns into a political debate. So therefore I will throw at least 2 cents worth into the conversation.

I agree with Kheldane on some issues some of the time, but I dont think there is anyway I could become a Libertarian because many of those views are so extreme. But they do have some good ideas.

I will have to say that where the safety and welfare of the general public are concerned we have to have laws to protect us. I dont want to be in a hospital that has not been inspected by building and health inspectors with no fire escapes, no handicap access, and only the minimum general safety rules in place if any. As far as the migrant labor goes, my view is to send them packing home and let them go through proper channels to work here. I think a guest worker program is a god idea but the more you have labor that may or may not be licensed then again safety is a concern. I think I will become a architect or an engineer and design my own flawed building that will fall down when the wind blows hard. Since there would be no laws regarding my license or regulations, I could do it never get into trouble because I would be building the cheapest structures around.

[Kheldane]

A large part of the proble, which you claim as a benefit, is the illegal immigration. If we didn't have laborers doing work at $2 an hour that others would do at $10 an hour, than wages would be rising to keep up with increased health costs.

Pure Economics my friends. And the illegal immigrants come screw that up and send $40 billion to Mexico that could be $160 billion kept here at home.

Actually, not to veer too far off course, healthcare costs are driven beyond the reach of normal people by the government:

>Doctor and Nurse liscensing (which artifically limits supply of people proving these services)

>Immigration restrictions (sure all the day-laborers can walk across - but it is government restrictions on immigration which keep thousands of highly qualified doctors/nurses from india, eastern europe, and southeast asia from being able to immigrate here - thus increasing the supply of doctors/nurses and lowering wait times and cost).

>Certificate of need laws - basically outlaws hospitals that compete with each other.

>Drug patents - give mammoth drug companies 7-year monopolies on the drugs the make

>Medical equipment patents - also gives monopolies. Did you know the same pace-maker that costs you $10,000 in the US only costs people about $1500 in the EU? And it's illegal to import pacemakers from the EU!

>Medicare & Medicaid - these two programs pay hospitals *below* cost - causing hospitals to shift the remainder to paying patients - which drives up insurance for everyone.

And one more point about your "pure economics": The difference between the $40M sent to MX and the potential $160M in wages that would have been here = $120 million in profit, which will be spent by local builders on houses, luxury goods, cars, or new business ventures. Simply paying wages does not increase wealth in a country (since the labor = price paid), but generating a profit is what keeps businesses thriving and growing.

[Kheldane]

...And who cares if the structural engineer calculating the loads of a 11 story building isn't qualified? After all, if the building collapses the free market will take care of it....

....You obviously dont' know much about the history of building codes in America. In fact, "interested parties" did not make sure new buildings were safe. "Interested parties" built buildings that were so unsafe that little children and old people hurled themselves out of the windows when they caught on fire. The sight of this wonderful free market solution led to modern building codes....

... I mean, really, sometimes I am just astonished at this kind of antigovernment claptrap...

...You don't understand patent law. Patent law protects the ownership of property--intellectual property in this case. The patent laws are no different from the laws that prevent someone from coming and taking your car and driving off in it. Would that be "socialist"? If you believe that anyone should have the right to steal my invention and sell it to other people, that is not a "free market" approach. ....

... So to call these important laws that protect property rights "socialist" is just flat out nonsensical and wrong....

To answer your first question (quoted above), I say the insurers and financiers of the building would care. Can you think of any reason they wouldn't care? Are they legally obligated to finance and insure every building that is proposed or built?

Concerning your point about history - of course you will have some people who are able to get financing for a building that may not be designed up to your standards - but hey, no body is forcing anybody to live in XXX building. I believe most people get a home inspection done before purchasing a house - don't you think a similar thing would occur for condos? Or maybe it's just an apartment and the residents decide to "take their chances". Well, it's a free country. People risk their lives and welfare all the time and no law is going to change that.

Notwithstanding your astonishmnet about my posts - you've done little to address my arguments against the regulations - and you have in no way addressed my point that regulations lead to increased building costs. I take it you agree with that point?

Concerning patents - There is no such thing as intellectual property. However - there is such thing as a government enforced monopoly. You can't own an idea - that's just crazy. Anyone can think of and use an idea or process anytime they want - that's called freedom of thought and movement. You can however own an automobile - which is a physical object. For example, it's not possible for me to be driving your car down west end while you are simultaneously driving it down dickerson road (). However, it is possible for us to both be thinking about an idea that you originally came up with, but somehow I found out about the idea. If that idea happens to allow us to make better products or provide better services to society - then it is in the interest of society that we both employ that idea and see who does better at it.

As I said - I don't want to go too deeply into the patent issue. But I've made my point. An idea is not the same as an automobile. And patents do increase the costs of the associated goods - so my initial point still stands.

Regarding socialism: See my earlier post about the definition of socialism. Quick refresher: Government direction of assets.

[Kheldane]

I agree with Kheldane on some issues some of the time, but I dont think there is anyway I could become a Libertarian because many of those views are so extreme. But they do have some good ideas.

I will have to say that where the safety and welfare of the general public are concerned we have to have laws to protect us. I dont want to be in a hospital that has not been inspected by building and health inspectors with no fire escapes, no handicap access, and only the minimum general safety rules in place if any.

I definitely respect your views and the views of all the other posters, smeagolsfree. They have asked some good questions and made a few good points. Of course, I have taken issue with many of the comments defending socialism...but anyway...

Quick question: Who's forcing you to go to the "unsafe" hospital? You say above you "don't want to be in a hospital that...". So why are you?

(we're speaking hypothetically here)

One more note: Handicap accessible??? Again - I would love to hear from anyone as to why a hospital would design a building where it was difficult to get wheelchairs in and out...anyone...please. Does anyone here really believe the only reason to make a hospital wheelchair accessable is because the government tells you to?

[ATLBrain]

Does anyone have an emoticon for a yawn?

[nashvol85]

Does anyone have an emoticon for a yawn?