WILFORD: To Fight Coronavirus, Congress Needs To Push States To Lift Regulatory Barriers

Andrew Wilford National Taxpayers' Union Foundation
Font Size:

As fears and economic fallout from coronavirus continue to mount, Congress and the Trump administration have been batting around ideas to address the crisis. One thing they should consider is nudging states away from policies that are actively hampering the country’s ability to respond to the virus.

Getting states to move away from burdensome regulations and red tape may not be as politically sexy as announcing funding for new testing kits, for example, but it can be just as important. Moreover, doing one hardly precludes Congress from doing the other. In fact, when Congress provides additional funding to states to combat coronavirus, it should condition that funding on making necessary reforms to their health care systems, at least in the short term.

One such change that states should make immediately, but may need federal prodding to do, is suspending so-called “certificate of need” laws. Certificate of need programs, which currently exist in 36 states, the District of Columbia, and Puerto Rico, establish state planning boards that must approve any major capital expenditures by health care facilities. These boards often include representatives of competing health systems, which have an incentive to reduce capacity elsewhere to funnel customers to their facility. Health care organizations must prove that there is adequate “need” for growing their facilities, or else the state board may prohibit the expansion.

The justification for these programs lies in the belief that hospitals and health facilities expanding beyond patient demand may cause them to raise prices for patients when their facilities are underused to help pay for empty beds. Yet whether this is a valid concern (or whether a state planning agency can effectively manage supply and demand) under normal circumstances is a moot point in the face of a public health crisis. The last problem our health system is facing right now is too many beds.

State certificate of need programs can only stand in the way of growing medical care facilities’ capacity to meet the expected surge of sick patients. Health care facilities willing and able to grow their operations or provide emergency accommodations should be allowed to do so yesterday, not have to wait on a bureaucrat (or representatives of a competing medical facility) to give the go-ahead.

States should also get out of the way of the growth of telemedicine, which offers the ability to consult with medical professionals remotely using technology like video chatting. Were telemedicine more deeply rooted in the American healthcare system, it could be enormously beneficial in responding to a health crisis by providing outlets to concerned patients other than visiting a hospital or clinic in person.

The particulars of the novel coronavirus would make telemedicine a very effective tool. Doctors and medical workers treating infected patients have been hit hard by the disease — a population that would likely be somewhat safer if patients were better able to receive medical advice over video chat rather than in person. Additionally, the fact that so many COVID-19 cases are mild means that many infected individuals will pass their symptoms off as a cold (or not have symptoms at all). Many more COVID-19 cases would likely be identified, and moved into quarantines, were an inexpensive video chat with a doctor an option instead of just going to an emergency room.

Unfortunately, doctors seeking to practice telemedicine have to contend with states guarding their ability to regulate patients within their borders. A doctor must have a medical license to practice medicine within the state the patient is in, not the doctor, so most doctors can only use technology to treat patients within their own states. Those kinds of arbitrary and legal barriers to treating patients are issues our healthcare system should not need to be contending with in the middle of a crisis.

To get state regulators out of the way, the federal government should encourage states to suspend their certificate of need programs and institute more robust medical license reciprocity, at least in the short term. Health officials have enough of a challenge ahead of them without bureaucrats getting in the way.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.