The Year of Regulatory Reform: An Introduction
The response of various states to the pandemic demonstrated that regulation is detrimental to business’ ability to respond quickly to disaster and is often arbitrarily applied.
As the coronavirus plunged states into a public health crisis, overwhelming hospitals and devastating businesses, it became clear that regulation was hindering the ability of people in private and public life to respond to the pandemic.
As cases of the virus surged in the early months of 2020, overwhelmed medical facilities lacked the beds they needed to treat patients and the personnel they needed to staff at-capacity hospitals. But, thanks to licensing requirements that stipulate what qualifications nurses and other medical professionals need to work in healthcare and to certificate of need laws, the ability of healthcare facilities to adapt to the pandemic was hindered.
There are, supposedly, very serious and incontrovertible arguments in favor of regulations like occupational licensing and certificate of needs laws, which require healthcare facilities that want to do things like add beds or new services to receive permission from the state and give competitors a chance to object.
Chief among these arguments is consumer safety. If nurses with enhanced qualifications are allowed to practice without the supervision of a doctor or to write prescriptions, that lack of oversight could be dangerous for the patient. Similarly, without standardized qualifications which medical professionals must meet in order to be licensed to practice in a state, patients are supposedly in danger of falling victims of quacks and charlatans.
But, opponents of these kinds of laws have always argued that regulations do nothing but restrict access to care and drive up the cost of medicine. And the pandemic quickly proved the merits of this line of reasoning true.
As the full brunt of the pandemic hit, states and the federal government quickly began passing laws that rolled back healthcare regulations:
In Arizona, Republican governor Doug Ducey signed a bill that required Medicaid plans in the state to “cover all health care services that are covered benefits to be accessible by telemedicine.”
In Florida, Republican governor Ron DeSantis signed into law a bill that allowed nurse practitioners to operate primary care practices without the oversight of a doctor.
In New York, Democratic governor Andrew Cuomo issued an executive order that allowed nurses “who are licensed and in good standing but not registered in the State, to practice in the State without civil or criminal penalties.”
On the federal level, the Centers for Medicare and Medicaid Services also issued a bevy of regulatory rollbacks, albeit temporary, that freed up nurses to work across state lines and to allow hospitals to more easily hire new personal without running afoul of Medicare rules.
In Congress, Rep. Dan Bishop (R-NC) co-sponsored a bill that would have made sure healthcare facilities weren’t penalized for violating certificate of need laws as they tried to move rapidly and provide access to care for all patients who needed it. Unfortunately, this expired when the new Congress was sworn in on January 3.
These few examples are far from a comprehensive list of regulatory reforms brought on by the pandemic. (Anyone looking for such a list would do well to explore the work the R Street Institute has done on the subject.)
But what these examples demonstrate is the widespread need to roll back supposedly necessary and beneficial regulation government of all levels felt as the pandemic unfolded. They are an admission that regulation does not work. It does not increase the efficiency of essential services or strengthen the industries on which people rely for their wellbeing.
By implementing regulations, government not only hindered the ability of the healthcare community to prepare for an emergency such as the pandemic but to adapt to the circumstances they suddenly found themselves facing, a result that unfortunately likely cost some patients their lives.
Regulation is enacted to help solve problems: to protect consumers, promote equitability and make essential services cheaper. But what the pandemic revealed is that government meddling only created more problems and hampered the ability of industries to respond quickly when they needed to most.
The fact that regulations were rolled back so suddenly by the same people who are usually staunch advocates for government as a stay on the excesses of the evil free market not only undercuts the case for those regulations that have been removed, but questions the efficacy of the broader state of regulation in the United States.
It is not possible that regulations are good for consumers if they need to be speedily repealed in times of crisis just so hospitals can expand their services and hire new personnel. And if its true that healthcare regulations like occupational licensing and certificate of need laws are actually detrimental to industry’s ability to offer its services to people when they most need them, in how many other industries is this true?
Regulation is often about oversight: but there was no debate surrounding the walk-back of restrictions on telehealth and expanded practices for nurses in many states. There were no long hearings wherein the implications were suddenly debated. Movement was taken swiftly and, in some cases, unilaterally in order to ensure resources could get to where they were needed most.
If the need is so dire now, it’s hard to argue that those regulations should be reinstated when things return to normal. They helped create a situation that left healthcare workers largely powerless to respond to a pandemic: why would any thinking person return to policies that would make it impossible for industry to respond to another crisis?
The pandemic has shown that regulation does not help industry provide crucial services to people when they most need them. It has shown that regulation does not accomplish the goals politicians claim it does: it does not protect consumers. In some cases, it may actually endanger them and make it harder for them to receive access to life-saving healthcare and for business to transport the goods they need to survive.
In light of this, 2021 should be a zeitgeist for regulatory reform. Its focus should be on ensuring that regulations rolled back during the pandemic are not implemented and that the shortcomings of regulation highlighted by government’s response to the coronavirus are resolved.
In the coming year, this blog will be focused on doing exactly that. Each week, we’ll endeavor to examine a regulation that has either been repealed or a regulation that has made it difficult for business to survive during the pandemic.