Congress Must Cut Red Tape that Reduces the Effectiveness of Our COVID-19 Response

March 19, 2020 stgblase

By Brian Blase

State and federal laws and regulations are hindering the private sector’s efforts to help fight the outbreak.

Effectively responding to the coronavirus epidemic requires innovation from private companies, medical professionals, and entrepreneurs. These folks are ready to perform heroic acts, but government rules and red tape are getting in their way. To take one tragic example, it appears that problems at the Centers for Disease Control led to early delays in testing and unreliable tests.

We must untangle this red tape to save lives. Hospitals and medical facilities in hotspots already are overwhelmed with patients, and the demands placed on them will only increase in the coming months. They need to rapidly expand capacity now to avoid being forced to ration care, as we already see happening in Italy, later.

Unfortunately, certificate-of-need (CON) laws prohibit hospitals from increasing their capacity without receiving approval from a board that often has interests in limiting supply. According to health-policy experts Lindsay Killen and Naomi Lopez, “Rather than allowing a hospital to be built, adding beds to an existing hospital, or offering some types of new technologies, many states require that these additions be approved by a board of existing competitors with every incentive to restrict new competition from opening or expanding.”

Killen and Lopez report that China, in contrast, was able to construct a 1,000-bed isolation hospital in just ten days. While building such a hospital is a tall order, many state CON laws simply prohibit facilities from adding extra beds or equipment or transferring beds or equipment to other facilities. According to the Mercatus Center, in 28 states hospitals must get regulators’ permission before adding beds, and in 30 states CON laws limit long-term acute-care services.5

A December 2018 report released by the Departments of Health and Human Services, Labor, and the Treasury reviewed all the evidence. It found that CON laws impose large costs, including loss of beneficial competition, and that they have not improved health-care quality or access. While CON laws should generally be repealed, removing them is an urgent priority in the current public-health crisis. Congress should preempt state CON laws for hospitals and health-care facilities for as long as this emergency lasts, and remove any related barriers to establishing remote testing or treatment facilities. Moreover, Washington should require that states affirmatively reenact such laws before they can go back into effect after the emergency ends.

Congress should also preempt other state regulations that inhibit health-care professionals from best responding to this crisis, including:

  • State restrictions on telemedicine that require a provider to be licensed in the same state where they provide services, or to first deliver services in person before providing tele-health services to a patient. Lifting these restrictions is particularly vital, since we want patients to avoid going to the hospital and emergency rooms unless they absolutely must.
  • State scope-of-practice requirements that prevent health-care professionals from using the full extent of their abilities. These requirements should be expanded to allow them to perform additional services within their training.
  • State restrictions that prevent doctors or medical professionals licensed in one state from practicing in another. Emergency licensing reciprocity between states would ensure that health-care professionals licensed in one state could travel to a state where the outbreak is more severe and practice.

These are commonsense reforms that will better enable and incentivize providers and entrepreneurs to best serve American patients and families. And in a crisis like this one, best serving American patients and families is what policy must do.

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