Healthcare regulations ostensibly exist to ensure the safety of patients and medical workers. But when regulations prove more harmful than beneficial, eliminating them often requires more effort than enacting them. Even overwhelmingly unpopular red tape can be difficult to cut, due to more red tape.
The Mercatus Center, an economics research organization at George Mason University, recently compiled an analysis and comparison of state regulations and made simple suggestions for preventing regulatory encroachment. Coupled with their 2020 analysis of state healthcare regulations, this provides insight into some efficient ways to both prevent and reverse the spread of counterproductive restrictions.
Regulatory Budget
A list of rules tends to lengthen over time, as new and unforeseen circumstances make more seem necessary, and people rarely get around to cutting unnecessary ones. Setting a regulatory budget involves capping the number of regulations or the amount of regulation-related spending, forcing legislators to review old laws and remove obsolete or redundant ones to make room for any new crop.
The framers of the Constitution probably never anticipated one state having 420,434 regulatory restrictions. But California—the most heavily regulated state—does, despite the Golden State being one of nine states with a full commission dedicated to removing antiquated laws.
One outdated rule prevents Californians from having telehealth visits with out-of-state doctors unless those doctors undergo the expense and trouble to obtain a California license. This failure to update state healthcare regulations to reflect modern technology prevents patients and doctors from taking advantage of it. With regulatory budget laws, California would be forced to decide if pre-internet rules were worth keeping if doing so meant the inability to pass more modern ones.
The United States spends $39 billion annually on administration costs alone for hospital regulatory compliance procedures, so states limiting the amount budgeted for regulation-related measures would save money while eliminating harmful laws. The Texas Sunset Advisory Commission, which ensures compliance with financial regulatory budget laws, estimates they save $25 for every dollar spent on the commission. This aspect of a regulatory budget makes it more palatable to legislators who would otherwise be reluctant to revisit old laws.
Sunset Provisions
A sunset provision stipulates laws are renewed after a certain time period, or they will fall off the books. Some basic rules should be exempt from any such time restraints, but healthcare regulations emerge as products of their time. They need frequent examination.
Idaho, which has a “zero-based” regulation practice, is the least-regulated state. It achieves this partly by enforcing sunset laws to automatically eliminate antiquated or unnecessary legislation. Some laws expire after only six months, which is beneficial for an unusual circumstance unlikely to continue beyond that point, such as a minor and temporary public health problem (not rising to the level that would trigger emergency action). Others expire after eight years, allowing technology-specific healthcare laws to remain on the books until they are likely to be technologically obsolete.
Both sunsetting and regulatory budgeting can take many forms, and they can be adapted to most efficiently serve each individual state’s needs. Cutting healthcare red tape does not need to be painful. Encroachment could not have occurred if legislators had set boundaries long ago, and it can be halted and reversed before it gets worse and more fully entrenched.