Lousy Regulations Murdered American Health Care—We Need Good Regulations to Bring it Back to Life
March 7, 2017
I rarely agree with modern Republican politicians, but they are absolutely correct about one thing. American government regulation and bureaucracy are out of control, and are the cause of grave harm to many American citizens and businesses. The Republicans are also correct in surmising that this is an extremely important campaign issue, and their party’s identification with the issue has been one of the reasons for their success in recent elections. On the other hand, the Democratic Party’s failure to acknowledge this issue, and its reputation as the party of Big Government, is a chief source of its spiraling defeats.
The modern hyper-regulatory state is, as much as any other single factor, also responsible for the demise of American health care (and likely many other industries/sectors). Bureaucratic over-reach and micro-management in the areas of medical billing and payment, documentation requirements, privacy, computer use, quality improvement, and cost control have shifted the focus in health care from taking care of patients to regulatory compliance. It is not a change for the better.
Massive, complicated, and intrusive regulations like the Affordable Care Act (otherwise known as Obamacare, which came in at 2,700 pages), and the Health Insurance Portability and Accountability Act (HIPAA, coming in at 1,400 pages) have huge negative impacts:
They are ineffective as a direct result of their bulk and complexity. No one can reasonably digest and understand such rules and their thousands of accompanying regulations.
They increase costs in at least two ways. The regulatory state demands multiple layers of administration, creating entire industries of health care administrators and support staff. It also increases the incidence of fraud as unscrupulous individuals and health care organizations capitalize on the rules’ complexity, and devise ways to satisfy the letter (but not the intent) of a complex regulation or documentation requirement, and qualify for payments they are not due.
They have a multitude of unintended consequences. Among other things, they obstruct and impede appropriate and necessary medical care. It is now so difficult to obtain diabetic testing supplies because of Medicare documentation requirements that many patients go without.
They divert limited resources away from patient care and distract medical professionals trying to take care of patients. Patient care can be difficult and confusing even in the best of circumstances. Having to satisfy complicated (and pointless) documentation requirements and to collect and report the volumes of data required by government programs makes it almost impossible to focus on a patient’s needs.
It is an incredible source of frustration and distraction for physicians and nurses, who are increasingly demoralized and burned out as a direct result of the regulatory state. It has led to a huge migration of doctors away from private, smaller practices, to large hospital- and health system-owned practices, where they seek shelter from the administrative storm. But there, an army of administrators flog and demean them with their own rules and hoops to jump through. Those remaining in small practices (myself included) struggle to understand and comply with the mountain of pointless regulations, and constantly worry that the next round of rulings will be so burdensome, and carry such costs, that we will be forced to close our doors.
This is not hyperbole. Government regulators dictate what types of medical problems I can see and be paid for; how I have to write my medical notes; how I communicate with my patients (and even how often I communicate with my patients); how I educate my patients (and how often I give them educational materials); what types of medical software I can use; and the minute details of how I use that software. They make getting paid for even simple office visits and medical services incredibly complicated, and sometimes it is just impossible to get paid for the work that I have done because of some inscrutable technicality.
What the regulatory state hasn’t done is improve the quality of medical care in America or lowered the costs—quite the opposite. None of the new rules and regulations shows consistent or large benefits. The government response to failure is more of the same—another layer of administration to add to the pile.
In all of this, the Republicans and I are in agreement, I believe. Where we disagree is in the solution, at least in part. They seem intent on getting rid of large swaths of the regulatory state and of regulations themselves. That may be a good thing. We definitely need to clear out the undergrowth of existing regulations to relieve their burdens prior to any new efforts.
But it is not clear that Republicans have any idea how to do things better. In some cases, less may end up being more, but it does not necessarily follow that fewer regulations will create better or less expensive care. And great caution must be taken to guard against removal of regulations that protect patients and medical professionals from abusive or dangerous practices.
Simplicity, brevity, and consistency must guide any efforts to re-regulate the American health care system. Devised properly, new rules should create obvious benefits and relieve administrative burdens. The need for associated training and administration or administrators should be minimized or even reduced. Regulations that require such things are often just bad regulations. Inflexible rules must be used only when absolutely necessary. In many instances, simple guidelines, or just guidance, may suffice. We must strive to find a balance between effectiveness and the burdens of compliance.
And the Republicans and I disagree about at least one other area. This is not something that we can rely upon the “free market” to solve. We cannot remove all regulation and be hopeful that the health care private sector will self-regulate. That is just not what markets do. And there are far too many examples of corporate and industrial abuses in our history to think that the world works in this manner.
Real-life, complex markets do not often mimic the simplistic markets for goods and services discussed in economic theory. “Free markets” help create financial efficiencies, and that is about it. More importantly, markets do not effectively create social policy. That is one of the important roles of good government. And that is what we need more than anything if we hope to save American health care.