HomeHealth Care NewsPandemic Proves Health Care Deregulation Saves Lives - Commentary

Pandemic Proves Health Care Deregulation Saves Lives – Commentary

Our most important weapon in the war against COVID-19 is getting government out of the way and letting the private sector act.

Governments at all levels have been repealing laws, suspending regulations, and ignoring previous restrictions. As a result, we have been liberating doctors, nurses, drug manufacturers, test makers, makers of personal protective equipment, etc. to do things that were illegal only a few months ago.

Americans for Tax Reform calculates 500 regulations have been waived in order to fight COVID-19. That count is probably way too low. The federal Food and Drug Administration (FDA) has eliminated so many restrictions it would be hard to count them all.

In part, the goal has been to free up a modern-day Manhattan Project to produce a vaccine in six months instead of the normal regulatory process that would take years.

Suffocating Regulations

Fortunately, the Trump Administration was ahead of the game when it made needed changes before the COVID-19 virus hit. Once in crisis mode, Congress and state governments also responded—apparently in sheer desperation.

Consider that, up until a few months ago, the only coronavirus tests that were approved for use in the United States were produced by the Centers for Disease Control (CDC), and half of those tests turned out to be defective.

Until COVID-19, it was illegal to produce, sell, or distribute ventilators, respirators, and other medical equipment without complicated and burdensome government regulatory permission. The same was true for personal protective equipment such as masks, gowns, and gloves.

Medicare dictated how many beds a hospital could have, and no one could create additional beds anywhere without government permission. In most cases, it was illegal for doctors to practice across state lines. Physicians who wanted to consult with patients needed to have a license in the state where they lived.

Before the crisis, it was illegal for employers and insurers to waive deductibles and copayments for the 26 million families with health savings accounts (HSAs). Medicare refused to pay for doctor consultations by means of phone, email, or Skype, except under special circumstances.

Until 2019, Medicare refused to pay for 24/7 access to physicians in the form of direct primary care services and concierge care. Patients in these practices can often reach a physician at night and on weekends by phone, email, text, or video chat. Employers were unable to put money into an employee’s HSA to pay for such service.

In January of this year, the Trump administration began allowing employers to fund health reimbursement accounts (HRAs) so their workers can buy individually owned insurance that stays with them when they leave for another job or exit the workforce. Under traditional group coverage, a departing employee could stay on the company plan via another federal rule, COBRA, but only for a short period of time and by paying the full price of the policy. Many go without (see related articles, pages 1, 11).

Government-Induced Coma

Meanwhile, the current approach to coronavirus mitigation may be making things worse. A nationwide lockdown has put the economy into a financial coma. Although the purpose of those measures was to keep people healthy, it may be having the opposite effect. Between people’s fear of going to emergency rooms and government orders to cease all elective surgery, patients with non-coronavirus conditions are not getting health care.

These developments have also been bad for doctors, nurses, and other medical personnel who are not dealing directly with the coronavirus. Across the country, plunging revenues from canceled nonemergency medical procedures have forced hospitals to furlough or cut the pay of doctors, nurses, and other staff.

Medical practices other than hospitals have also been adversely affected. In a Dallas-area survey conducted on April 7 and 8, almost half the medical practices said they had furloughed workers and almost a quarter had laid off staff. Respondents projected the numbers would be even higher in May.

Wealth and Health

Then there are the economic effects of the lockdown. University of Chicago economist Casey Mulligan has prepared a daily updated chart showing the cumulative cost of the reaction to COVID-19, including the loss-of-life costs and the economic costs of shutting down the economy. The latter are completely swamping the former.

What is not generally understood is that the economy has its own effect on health. Health economists have long known that “wealthier is healthier” and vice versa. Put simply, having no job and no income is bad for your health.

John C. Goodman, Ph.D. (info@goodmaninstitute.org) is founder, president, and chief executive officer of The Goodman Institute for Public Policy.


John C. Goodman
John C. Goodman
John C. Goodman is president of the Goodman Institute for Public Policy Research.


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