Well, it's not exactly profits that are a problem here. The author points out that these hospitals are subject to regulation and that the regulation does not ac

Well, it's not exactly profits that are a problem here. The author points out that these hospitals are subject to regulation and that the regulation does not actually condition funding on spare capacity. That's just going to lead to broken results; doesn't matter whether it's for profit or not. A completely publicly funded healthcare system without spare capacity requirements would falter in the same way.