The COVID-19 pandemic disrupted the status quo in healthcare. As we recover, lawmakers now have an opportunity to learn from our mistakes and triumphs to chart a new course. Among the most notable changes in care delivery brought about by the pandemic is the rise of telehealth. Yet as we update this report to reflect actions taken in 2022, it is hard not to notice that states have shown a surprising lack of urgency in making comprehensive updates to their telehealth laws.

While telehealth services were available long before the pandemic, millions of Americans used telehealth for the first time over the past three years. The rapid adoption of telehealth technology was enabled by emergency regulatory reforms undertaken at the federal and state levels. For example, federal officials made select changes to the Medicare program, and governors in nearly all 50 states advanced access with flexible provider licensure for new telehealth uses by executive order.

However, most of the emergency actions taken early on in the pandemic were only temporary. When state public health emergency declarations ended, and executive orders were withdrawn, many of the new flexibilities were lost. While some states recognized the benefits of regulatory flexibility and have adopted permanent reforms, a surprising number have only made minor tweaks to their laws, and most only benefit one kind of service or provider.

States must continue to refocus their efforts to ensure clear laws and guidelines are in place for innovation to emerge so that patients and providers can benefit from this helpful tool in any care delivery toolbox. Immediate action will be needed to avoid disrupting patient access to providers they gained during COVID, as other options may not exist in their community. For many patients, cutting off remote access to care is the difference between them receiving care in this manner versus no care at all.

There are four key areas where states have an opportunity to unleash innovation and embrace the potential of telehealth for expanding patient access to high-quality care:

1. Patients Can Access all Forms of Telehealth: State laws and regulations should define telehealth in broad terms that do not favor one mode of telehealth over others or preclude future innovation in care delivery. This is called modality neutrality.
2. Patients Can Start a Telehealth Relationship by Any Mode: State laws and regulations should not prohibit patients from initiating a relationship with a telehealth provider via their preferred modality.
3. Patients Face No Barriers to Across-State Line Telehealth: State laws and regulations should not prevent patients from accessing virtual care from providers licensed in other states.
4. Patients Can See Many Kinds of Providers Over Telehealth: State laws and regulations should allow providers to practice at the top of their license to take the next step toward a more quality-oriented, affordable, and innovative health system.

This report examines all 50 states in these four key areas.

This report does not cover all telehealth-related policy changes in 2022. For example, it ignores actions taken in states to expand or adopt compacts. Many of these smaller changes are not highlighted because they have severe limits, or only tweak around the edges.

By contrast, adopting this state policy agenda for telehealth innovation would remove deleterious barriers that have historically discriminated against those in certain geographies, such as rural communities or underserved urban areas.

The post State policy agenda for telehealth innovation appeared first on Reason Foundation.

California’s Proposition 1 would add an amendment to the state constitution (Section 1.1, Article 1) prohibiting the state from interfering “with an individual’s reproductive freedom in their most intimate decisions, which includes their fundamental right to choose to have an abortion and their fundamental right to choose or refuse contraceptives.”

The amendment was drafted and passed by both houses of California’s state legislature in response to the U.S. Supreme Court’s May 2022 Dobbs v. Jackson Women’s Health Clinic decision overturning Roe vs. Wade and other precedents. The ballot initiative must pass with a two-thirds majority to be added to the state constitution.

Fiscal Impact

The California Legislative Analyst’s Office found that Proposition 1 would have no fiscal impact because California’s law already provides these rights. Critics and opponents of the amendment as drafted have proposed scenarios in which adding this right to the state constitution would cost the state more due to litigation, potentially broader interpretations of abortion rights than exist by current law, and the provision of abortions to patients from other states. No estimates of these costs have been circulated, and we discuss such scenarios.

Arguments in Favor

Arguments in favor of the amendment come from advocates of abortion rights and are targeted to the majority of California residents that polls show favor abortion rights and oppose the U.S. Supreme Court’s Dobbs v. Jackson Women’s Health Clinic decision. Most of the state’s prominent Democrats, including Gov. Gavin Newsom and majority leaders in the state legislature, have endorsed the amendment, along with groups such as Planned Parenthood Affiliates of California, The League of Women Voters of California, and the California Medical Association.

Proponents argue that while abortion rights are already a part of California law, enshrining them in the state constitution would add another layer of protection. State Assembly Speaker Anthony Rendon’s endorsement is representative of almost all California Democratic officials: “We know from history that abortion bans don’t end abortion. They only outlaw safe abortions. We must preserve the fundamental reproductive rights of women here in California because they are under attack elsewhere.”

While the political nature of the short and simply worded amendment is often used by opponents to dismiss it, many endorsements and op-eds favoring the amendment also suggest Proposition 1 appeals to the state’s majority voters on political grounds. Gov. Newsom says, “California will not sit on the sidelines as unprecedented attacks on the fundamental right to choose endanger women across the country.”

Arguments Against

Arguments against Proposition 1 fall into two distinct categories. The first are straightforward arguments by those who oppose abortion. The California Republican Party, California Conference of Catholic Bishops, and prominent pro-life groups oppose the amendment on grounds familiar to the debate about abortion that has unfolded over several decades.

The second category of arguments against Prop. 1 are best characterized as pragmatic arguments targeted to pro-choice voters. They begin by arguing the amendment will be of limited benefit, as California law already protects abortion rights, and express concerns that adding these protections to the state constitution could entail additional costs and, potentially, new lines of attack on, or risks to, Californians’ abortion rights.

Of particular concern to these pragmatic opponents of Prop. 1 is the very simple wording of the amendment, which some fear could be interpreted by California’s courts as enshrining a broader right to abortion than California, as well as now-overturned precedent in Roe v. Wade, allow. California’s current law places limits on abortion at the point of fetal viability, whereas the wording of the proposed amendment simply refers to the “fundamental right to choose to have an abortion.” 

If state courts were to hear a case and rule that the new amendment enshrines a right to all abortions, late-term abortions could be legalized in California. This could be of concern to generally pro-choice California voters, opponents of the amendment argue, for several reasons. First, many who support abortion rights generally may not support late-term abortions. In a San Francisco Chronicle column, Joe Matthew notes recent polling indicating that 70 percent of Californians oppose late-term abortion, numbers almost as high as Californians’ supporting abortion rights earlier in a woman’s pregnancy.

A June 2022 article by legal scholars Allison MacBeth and Elizabeth Bernal urged top-ranking state Democrats to add technical language to the amendment referencing past national legal doctrine—specifically “Griswold v. Connecticut, Roe v. Wade, or Planned Parenthood v. Casey.” The authors argue that citing earlier precedent would effectively limit late-term abortions, while not clarifying the language of the amendment could create a new way for abortion opponents to mount a challenge in federal courts.

The authors of the official argument against Prop. 1 also express concern about California becoming a “’sanctuary state’ for thousands, possibly millions of abortion seekers from other states, at a staggering cost to taxpayers.”

Discussion

Many ballot initiatives in California and other states require the informed voter to familiarize themselves with details of fiscal policy and regulation that are not usually at the forefront of political debate, and on which voters may not have strong opinions when walking into the voting booth. California’s Proposition 1 is just the opposite.

Almost all American voters are familiar with this issue, and most Californians will vote according to whether they believe it should be legal for a woman to get an abortion. Recent polling confirms that a majority of Californians consider themselves pro-choice and that, as of this writing, Prop. 1 seems very likely to pass. California’s pro-life voters are likely to vote against Prop. 1 in overwhelming numbers.

California’s pro-choice voters must decide if there are costs or risks to enshrining the language of the proposed amendment in their constitution. The benefits, from a pro-choice perspective, are the reduced risk of a future state judiciary overturning abortion rights, as well as the political benefits pro-choice voters attach to this contentious issue. While quantifying these benefits is not possible, pro-choice voters must weigh them against the costs laid out by those favoring abortion rights but no constitutional amendment.

It is plausible if not likely that the amendment will create new ground for legal maneuvering and political engagement for pro-life activists in California and nationwide. However, those arguing this point broadly undercut the foundations of the argument that pro-choice voters should not support the amendment—that Californians’ abortion rights are already safe. Pro-choice arguments against the amendment appear to simply ignore that political and legal resistance will continue in the absence of an amendment as well as if it is passed. California is already a political and legal lightning rod for this contentious issue. If we can learn one thing from this seemingly circular argument, it is that activists, lawyers, and energized voters on both sides of the issue will find a way to keep these battles alive not just in California but in all 50 states.

The specific concern about the amendment’s language possibly being flawed is potentially of more concern to pro-choice voters. Opening up new battlegrounds on the particularly hot-button issue of late-term abortions could very likely complicate matters in the future. Citing legal precedents as Allison MacBeth and Elizabeth Bernal proposed may have foreclosed that possibility. Instead, California’s top Democrats and pro-choice groups appear to have opted instead for a simple statement of purpose.

A more carefully worded amendment may have served the dual purpose of preventing legal battles in state court (with the amendment itself) as well as federal courts (with the more precise language). But once again, the idea that either side would simply give up in any scenario, especially in the nation’s largest and most progressive state, is not credible. With future political and legal battles almost guaranteed no matter the amendment’s fate, pro-choice voters may simply value the statement in itself.

Voters’ guides for other propositions on California’s 2022 ballot.

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Many people are born with or develop very serious medical problems that threaten to shorten their lives or severely reduce their quality of life. This tragedy can be avoided or ameliorated with innovative pharmaceutical treatments. Simply put, pharmaceuticals can help people lead happier, longer, and more productive lives. But pharmaceutical innovation in the United States has slowed in recent decades while pharmaceutical costs have skyrocketed, placing many vulnerable individuals beyond the hope of receiving life-changing drugs.

Between the 1970s and 2000s, the average cost of bringing a new pharmaceutical to market increased by an order of magnitude, even after adjusting for inflation. This has occurred over the same period that major technological breakthroughs have been made in the fields of computer processing, telecommunications, engineering, and even the practice of medicine more broadly. Indeed, most U.S. industries have been able to create innovative new products and push down costs since the mid-20th century.

So why has pharmaceutical development become slower and more costly? After all, big screen panel televisions are nice but not nearly as critical as health and life itself.

The U.S. government clearly understands how important pharmaceutical development and innovation are. Congress has established and financed a vast bureaucracy to oversee pharmaceutical development and passed many laws intended to spur innovation and reduce costs. Yet, it seems the more efforts Congress makes, the higher prices climb and the slower innovation becomes, imposing negative consequences on both the quantity and quality of human life. Many observers find this result understandably frustrating.

What if the way we choose to regulate pharmaceutical development contributes to these frustrating results?

Most industrialized nations have created national or supranational regulatory authorities to oversee pharmaceutical development, but not all work the same way. Comparing the U.S. Food and Drug Administration (FDA)—the agency with primary responsibility for regulating pharmaceuticals—with corresponding agencies in other countries offers key insights.

Even comparing today’s FDA to the FDA at different points in time reveals how the agency’s regulatory apparatus and relationship with industry have evolved, often with consequences for the health of private individuals. From these insights, it is possible to imagine different methods of pharmaceutical regulation that would better serve society’s needs by encouraging widespread availability of life-saving drugs at prices individuals can better afford.

This brief reviews the regulatory apparatus governing pharmaceutical development in the United States.

Part 1 examines the historical cost trends—for both time and money—of bringing an approved pharmaceutical to market.

Part 2 examines the effect of pharmaceutical regulation on human life and considers both the benefits and costs of that regulation on Americans’ health.

Part 3 explains the basic regulatory process for pharmaceutical development and examines key policy issues and economic trends that influence pharmaceutical development.

Part 4 highlights emerging special topics in pharmaceutical regulation, such as medical research into the cannabis plant and its derivatives, and the FDA’s growing scope of powers, including previous attempts to regulate common food items.

Part 5 concludes with recommendations for how best to reform the FDA’s mission to achieve the broad public goal of improving the lives and health of all Americans.

Full Brief — Focus on the FDA: Allowing the Market to Determine Effectiveness

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“Nothing epitomizes market failures more than the cost of insulin. Many Americans experience out-of-pocket costs anywhere from $300 to $500 per month for this life-saving drug,” Gov. Gavin Newsom remarked when announcing the passage of the insulin plan. “California is now taking matters into our own hands.”

While it is very unfortunate that Americans pay high prices for lifesaving insulin, high insulin prices are caused by a maze of regulation, bureaucracy, and pharmacy benefit managers that drive up the costs. While California’s efforts are well-intentioned, high insulin prices would be better addressed by regulatory reform and private initiative rather than a government-run program administered by a state with a dubious track record of competence and efficiency.

Evidence that the private sector can produce affordable insulin is available just south of the border. In Mexico, insulin prices are about one-sixth of those in the United States for a variety of reasons. Some Americans cross the border to take advantage of the lower costs. While it is illegal to import prescription drugs to the United States, the federal government generally does not enforce the prohibition for personal importation of up to a three-month supply of most medicines. But making regular trips to Mexico isn’t a sustainable solution for most California insulin users.

One problem in the United States is a lack of competition arising from patent protection for insulin delivery devices and barriers to getting approval for biosimilar products. There is some promise on the latter front as the Food and Drug Administration approved two biosimilars in 2021.

But additional reforms will likely be needed to bring US insulin prices down to international levels. Writing in Mayo Clinic Proceedings in 2020, the Mayo Clinic’s Dr. Vincent Rajkumar recommended that the United States participate in a reciprocal approval process with Canada and Western European countries. If a drug regulator in one of those nations approves a new insulin treatment, it could also be sold in the United States.

Further, Rajkumar recommended limiting the length of initial patents and preventing the use of additional patents on a single drug to extend market exclusivity. Although generous patent protection is defended as a means of encouraging innovation, incremental changes in how insulin is produced or delivered may not merit long exclusivity periods.

Costs could also be reduced if patients could obtain newer insulin formulations without a prescription. Early insulin formulations are still available on a non-prescription basis, having been grandfathered in before the Food and Drug Administration acquired the authority to classify new drugs as prescription-only. Although non-prescription insulin accounts for a small portion of the market, its availability without publicized safety incidents likely suggests that all insulin formulations could be safely dispensed without a prescription.

Some price relief might also come from disruptive new market entrants such as Civica RX, a nonprofit generic drug company that plans to sell insulin for $30 per vial. Civica was founded in 2018 with the support of major health systems, including the Mayo Clinic, and large philanthropies (one of which also supports my employer, Reason Foundation). Nonprofits that prioritize delivering social benefits over net income can reasonably be considered a market response since they address consumer needs without the coercion and top-down thinking that characterizes government interventions.

For-profit companies can also address the high price of insulin. Mark Cuban’s Cost Plus Drug Company is offering prescription drugs at steep discounts by selling direct to consumers, eliminating markups imposed by pharmacy benefit managers and other middlemen. Cuban’s company appears to be working on adding insulin to its low-cost generic drug offerings.

Meanwhile, the same state government considering entering the complex pharmaceutical industry is struggling with basics, like upgrading its own computers and information technology systems. Rather than take a state-driven insulin approach, California could more effectively bring down insulin prices by importing it or purchasing it from new entrants like Civica RX and Cuban’s company.

The post California’s misguided plan to make its own insulin appeared first on Reason Foundation.

We might expect to find one or more interest groups guarding economic and political power while everyone else in the industry is squeezed, but child care has no clear suspects. Unlike big tech or big pharma, there is no group of ‘big child care’ companies setting high prices or leveraging the power to get government regulation to stifle small startups because there’s not enough money in it. There is no workers’ union resisting change. While current regulation is overly complicated, costly, and burdensome, there is no bureaucracy whose power and jobs stem from the status quo.

The White House made child care a marquee item in its Build Back Better plan at a projected cost of over $200 billion. President Joe Biden’s proposal focuses primarily on subsidizing existing licensed child care options for low- and middle-income households and subsidizing providers in areas where supply is too low.

Debates over big-ticket plans like the Build Back Better proposal often force us into familiar political tribes, crowding out fresh thinking and innovative ideas on a small scale. However, a more detailed look at the many tradeoffs young parents face and the many arrangements they make to care for their young children shows how critical informal arrangements are and how daycare is the right option only for some people some of the time. By engaging local communities and research across multiple fields, there is scope to facilitate more access to this informal sector that should interest both sides of the Build Back Better debate.

Parents prioritize the basic care of young children above virtually anything else. Maintaining a safe, positive, well-monitored environment around the clock for infants and toddlers, and to a lesser, but still significant, degree, for older children is not a matter of if, but how. We often bundle this necessity in our definition of child care with other vital services such as early-childhood education, but the distinction is important. What many call America’s child care crisis is not a crisis of children not receiving essential care but rather what must be sacrificed to provide it.

Care, especially for the youngest children, must be provided 24 hours per day by one or both parents at home, or children need to be sent to daycare or placed in the care of others—often family members, close friends, and neighbors. The latter category is often called the informal sector of childcare, which is a part of the problem often lost in policy debates, but just as prominent for all parents as daycare.

When they are fortunate enough to have the suitable options, parents often choose “informal” care over a daycare center. An illustrative example is Sen. Elizabeth Warren, herself the author of a childcare plan for her 2020 presidential campaign that was similar to the Build Back Better plan being pushed by the Biden administration.

Before detailing her plan, Sen. Warren told a personal story of struggling to find adequate and affordable care for her young children while starting as a law professor. At her wits’ end, she called her aunt, unsure of what to do. Warren says:

Then Aunt Bee said eleven words that changed my life forever: “I can’t get there tomorrow, but I can come on Thursday.” Two days later, she arrived at the airport with seven suitcases and a Pekingese named Buddy — and stayed for 16 years.

Warren’s dilemma is one to which many young parents likely relate, whether starting promising careers or simply needing work to make ends meet. And while Warren may have been unusually lucky, the importance of one’s close social ties—family and friends—in caring for children while balancing life’s other demands is quite common.

Ensuring basic care for children can cause not just parents but other close relatives and friends to reshuffle their major life decisions, further underscoring the paramount importance modern society places on caring for young children. Warren and those personally close to her were prosperous and stable enough to shift resources such that a young mother didn’t have to choose between her children’s well-being and her career.

Not everyone is so fortunate. Families and close friends in poorer communities put similar importance on helping young parents care for children, but the help provided either by a single family member or many people chipping in is more likely to entail sacrificing other near-essential activities. Missed days of work and lost opportunities for education and career development become more likely in groups where those sacrifices hurt the most, further entrenching people in poverty.

Close social bonds also often come with trust and intimacy between parent and caregiver that arm’s-length daycare centers cannot match. Familiar relationships allow richer assessments of quality and safety than rules written down by a center or its regulators. Parents often seek to mimic these relationships even in informal childcare arrangements where they don’t already know the person well. Live-in nannies effectively become part of a family, and parents are more likely to trust neighbors’ children to babysit at a younger age than a babysitter they do not know.

Center-based care and arrangements built on close personal ties are imperfect substitutes. Some informal arrangements, as well as parents staying home, have uniquely desirable attributes. While this fact alone does not preclude center-based care as a viable model, the competition daycare centers face from these many arrangements plays a part in explaining the strained business model center-based providers face.

Many other goods and services historically produced in the home are now mostly supplied in the market. But child care, especially basic care for young children, lacks significant economies of scale. Few services are more labor-intensive.

Whether one agrees with the caregiver-child ratios that states impose on child care centers, there are only so many one-year-olds who can be put in a room and effectively monitored without needing more help. There is also little scope for center-based providers to invest and differentiate themselves.

Over-regulation of licensed child care is one symptom of this “trust gap.” Without the understanding naturally found in close personal relationships, busy families need to be able to find information to help them verify the quality and safety of potential center-based providers. If federal and state governments didn’t create these rules by edict, market forces would likely induce providers to develop them in some form.

Such rules might better reflect what some parents want, especially when the rules are allowed to meaningfully vary across providers. But they would still be rules on a piece of paper, inevitably falling short of the level of comfort parents find in child care from people they know. High prices and low-profit margins at daycare centers are a difficult stalemate to break.

The graph below presents two critical insights:

Percentage of U.S. children participating in center-based child care by family income:

The original chart, reprinted from Equitable Growth, is titled, “Low-income children disproportionately miss out on center-based care.” This disparity is significant and almost certainly driven by high costs.

The chart’s high-income results are equally informative because high costs are not the only thing keeping Americans from putting their kids in daycare centers. Informal arrangements, big and small, appear to play a significant role in the childcare decisions of all parents.

Center-based child care sometimes fits some families’ needs, and affordability is but one of several factors limiting the viability of this model. The White House’s $225 billion plan in the Build Back Better proposal primarily focuses on helping parents pay for expensive center-based care. The subsidy fully covers daycare costs for low-income families and gradually phases out up to 2.5 times a state’s median income. The remaining child care money in the plan is mainly set aside for more subsidies–payments to providers to address supply issues in neighborhoods judged to be underserved.

Nowhere does the plan claim to realize cost savings, as “Medicare For All” proponents often promise. Nowhere does the plan promise to create higher quality child care than the often-useful but inherently limited center-based model. The only major change to the licensed center-based model that President Biden and Sen. Warren call for is higher pay and educational requirements for center workers, which is almost sure to increase costs for families and force some very qualified child care workers out of jobs.

Large federal spending on center-based and other licensed daycare will not solve the childcare crisis. Informal childcare is just as important to many parents and has some benefits that centers cannot replicate—which the data on income and center usage confirm.

The best way to facilitate relationship-based care in poor communities would be to ease people’s overall financial strain. Giving parents more-flexible help to find what works for them in the market or from family and personal connections will reliably lead to better outcomes than the government prescribing a few subsidized options.

As of this writing, the Biden administration is trying to keep its big-ticket child care plan on the table rather than getting the 2021 child tax credit, which expired, reinstated. The child tax credit was a help to low-income families, so rather than moving the child care policy in the right direction, the president’s plan is likely doubling down on the wrong one.

Searching for a magic-bullet national policy to strengthen informal care is tempting, but finding a way for a bureaucracy to avoid turning the unique benefits of personal relationships into costly top-down regulation is unlikely. In this case, national or state policy may not be the best way for civil society to contribute its resources and energy. But the informal sector is at least as large and important to parents as a daycare, and its results strain low-income parents disproportionately.

On a small scale, there are many promising ideas and the scope to implement and develop many more. For example, a southeast Detroit pilot program finds promising results from making educational, advisory, and problem-solving resources available to informal child care providers. The providers self-report that the biggest benefits stemmed from activities where they were put into groups and could interact informally rather than simply receiving instruction.

Another recent study shows opportunities to build social capital across informal networks of parents and providers and finds that single mothers plugged into these networks have an easier time returning to work than mothers using daycare centers.

The fundamentally bottom-up nature of this change, the very thing that makes it promising for new ideas bridging old partisan gaps, also creates big challenges in policy terms. Encouraging informal child care networks, advising non-profits on best practices and innovations, and presenting these informal networks as an often-desirable alternative to daycare is challenging in today’s political environment and difficult to scale at the state and national level.

While the significant taxpayer investments subsidizing both parents and providers of center-based care are an essential topic for public debate, the focus on the largest ticket items can distract policymakers and stakeholders from many important small ideas and improvements that could be made. And those policies will continue to be needed, whether some form of Biden’s Build Back Better plan passes or not.

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Millions of Americans tried telehealth for the first time during the COVID-19 pandemic. Federal officials made select changes to the Medicare program and governors advanced health access with flexible provider licensure for new uses of telehealth by waiving certain barriers by executive order. All of these changes garnered numerous headlines, and many state legislatures followed suit by updating their laws.

But once the public health emergency declarations started to end or executive orders were withdrawn, overnight or shortly after, many of the new flexibilities were lost. Furthermore, even though many states passed new laws related to telehealth, many of them made incremental changes because policymakers lacked a best practices roadmap for success.

While they cannot and should not replace all in-person medical appointments, virtual visits can save patients time and help them avoid germ-filled waiting rooms. Providers can also cut down on their risk of exposure and take some pressure off overburdened systems as they can see patients from an office or home. To experience the full potential of telehealth, states should follow these best practices.

This toolkit aims to help policymakers take the next step toward a more quality-oriented, affordable, and innovative health system by ensuring that their state laws on telehealth remove deleterious barriers that have historically discriminated against those in certain geographies, such as those living in rural communities or in underserved urban areas. This report explains policy best practices for ensuring that providers and patients can fully realize the benefits of using telehealth services when appropriate and provides a simple-to-read stoplight rating for each state on how closely their policies align with those best practices. The state profiles point state lawmakers to specific sections of law and regulation that need to change to improve their ranking.

States need to act now to ensure the physical and economic needs of their state are met with a more quality and future-oriented health system.

Full Report: Rating States on Telehealth Best Practices

State Policy Agenda for Telehealth Innovation

Previous Jan. 5, 2022 Version of this Report: Rating the States on Telehealth Best Practices

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In an executive order helping make telehealth services more accessible for Californians by relaxing security and privacy requirements for health care providers, Gov. Gavin Newsom highlighted the problems, “I find strict compliance with various statutes, regulations, and certain local ordinances specified or referenced herein would prevent, hinder, or delay appropriate actions to prevent and mitigate the effects of the COVID-19 pandemic.”

Gov. Newsom is right, but his executive actions reducing some of the barriers preventing patients from using telehealth services are temporary and need to be made permanent. A new Reason Foundation report that rates each state’s telehealth policies according to a set of best practices for promoting patient access and flexibility for providers finds California has plenty of room for improvement.

For example, California currently requires out-of-state health care professionals to hold a California license to provide telehealth services in the state. In other words, Californians don’t have access to specialists in other states unless they are willing to travel to that specialist’s location or that specialist is able to—and wants to—undergo the burdensome process to obtain an additional license from California. This bureaucratic hurdle undermines one of the principal benefits of telehealth: the ability for patients to access care regardless of their physical location.

These types of archaic state-by-state licensing schemes don’t make sense in the context of telehealth. Some states, like Texas, Colorado, and Utah, have tried to promote the use of telehealth across state lines by agreeing to multi-state licensure compacts, which make it easier for professionals in member states to receive licensure in other member states that are part of the compact. However, California hasn’t joined any multi-state licensure compacts.

Florida and Arizona have identified an even better approach for enabling cross-state telehealth services. Both states have created a simple telehealth registration process for out-of-state health care providers. To register, a provider must only submit proof that they are licensed to practice in another state. This system is superior to multi-state compacts because it does not require action on the part of other states.

The telehealth study also notes California mandates that insurers cover and reimburse telehealth services in the same manner as in-person care. These mandates are intended to promote the adoption of telehealth, but ignore some of its key differences and benefits. Telehealth has the potential to provide on-demand health care services without the administrative and overhead costs associated with in-person care in California. These differences in costs mean that many telehealth services have the chance to save patients money and thus shouldn’t always be reimbursed at the same rate as in-person services. Moreover, telehealth is still an evolving field and technology, and the state should avoid forcing telehealth into the same rules of the complex, outdated health care system that everyone agrees isn’t working. The best way to promote telehealth improvements is to maximize flexibility and choice for patients and providers.

On the positive side, in the early months of the COVID-19 pandemic, California passed a law that allows nurse practitioners to practice via telehealth to the full extent of their education and training after three years of practice. According to a report from California Health Care Foundation, the share of California health care providers using telehealth increased from 30 percent before the pandemic to 79 percent by September 2020. A Blue Shield of California/Harris Poll of Californians conducted in February 2021 found that 49 percent of respondents had already had telehealth visits during the pandemic and 89 percent were satisfied with the services. Polling also consistently shows that patients remain likely to use telehealth services in the future.

Telehealth cannot, and should not, replace all in-person health care services. But there are plenty of times where telehealth is the best option and California should ensure its telehealth laws do not prevent new technologies and services from advancing and serving patients. Getting rid of arbitrary barriers and enabling cross-state telehealth licensing would help Californians now and in the long run.

A version of this column previously appeared in the Los Angeles Daily News.

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With debates about the constitutionality of President Joe Biden’s move, threats of lawsuits flying before the rule has been drafted, and many citizens questioning the federal government’s overreach, it is important to note that what’s happening now looks similar in some ways to the big government playbook laid down by the South Coast Air Quality Management District (SCAQMD) in Southern California back in 1990. The district, as friends and enemies called it, was ground zero for aggressively expansive government public health regulations in Southern California.

In the halcyon days of the late-1980s and early-1990s, California had severe problems with ambient air pollution and traffic congestion. Although a vast swath of industries had been forced to reduce their air pollution emissions (or leave California entirely) in order to combat the menace, one last stubborn source of emissions remained: the dreaded, selfish, “single-occupant vehicle” drivers who would drive by themselves in their very own cars over California’s gridlocked freeways to get to and from work. About 70 percent of total emissions in the South Coast Air Basin at the time came from “mobile sources,” mainly cars and light trucks, and that percentage was rising. At the time, it was estimated that by 2010 mobile sources would contribute 95 percent of carbon monoxide emissions, 80 percent of oxides of nitrogen (an ozone precursor chemical in vehicle emissions), and 40 percent of what were then called “reactive organic gases” — the photochemical smog that covered the Los Angeles skyline at the time.

The dreaded drivers and rideshare-resisters were deemed a sufficient evil that SCAQMD issued a rule to require employers with over 100 employees to find ways to discourage solo-commuters and encourage their employees to carpool, vanpool, or take mass transit to and from work instead. In some ways, it’s similar to the approach that the Biden administration is taking to force the vaccine-resistant into the vaccinated carpool lane.

In 1988, the SCAQMD developed Rule 1501 which required large employers (of over 100 employees) to increase the average vehicle ridership (AVR) of their employees to 30%, 50%, or 75% depending on such things as transit availability in their regions, and the district’s expectations about their ability to achieve such targets. The average vehicle ridership at the time was 1.13, or basically, one person per vehicle. To give you a flavor of the rule’s specificity, the first version of Rule 1501 called for: 

“…employers with 100 or more employees to develop and implement a trip reduction plan for those employees who report to work between 6:00 a.m. and 10:00 a.m. These employers would be required to designate a trained transportation coordinator to develop and implement the trip reduction plan. This plan would include an inventory of current measures used by the employer to increase AVR, a verifiable estimate of the current AVR at the worksite, and a list of incentives the employer would commit to undertake which could reasonably be expected to achieve the AVR target within 12 months of plan approval.”

The requirements of Rule 1501 grew more stringent over time, ultimately requiring the region’s employers, specifically via the personal authority and certification of the company’s executive officer— to submit complex, rigidly standardized rideshare plans to SCAQMD. (We’re talking about full, four-inch binders with prescribed color-coded tabs and a signed letter by the company CEO.) The requirements also included submitting the results of a week-long ridership survey of employees (to be conducted every six months) that met a district-specified 75-percent-response rate from employees who commuted in the previously mentioned time slot.

As two of my doctoral advisors, the University of California-Los Angeles’ Martin Wachs and the University of Southern California’s Genevieve Giuliano, demonstrated, the onerous rules created a new job description of “employee transportation coordinators” and an entirely new class of professionals. Ultimately, many employee transportation coordinators would wind up representing the government and other rideshare-promoting groups more than their own company’s interests. And many of them went on to work at state air pollution agencies once they moved on from their private-sector origins.

As was the case for many environmental regulations, the employer mandates pioneered locally in California by aggressive air pollution control districts would subsequently be adopted at state and federal levels. In 1991, Federal Clean Air Act Amendments and the California Clean Air Act later ratified the district’s approach. The Federal Clean Air Act required that areas with ozone emissions grossly exceeding the Federal Ambient Air Quality Standard for Ozone must require employers of 100 or more employees to achieve a 25 percent increase in AVR levels above a 1991 baseline level by the end of 1996. The 1991 California Clean Air Act reflected the federal mandate but added more specific requirements that severely polluted areas achieve an average of 1.5 or more persons per passenger vehicle during weekday commute hours by 1999. Finally, the California Air Resources Board approved a guidance document that included employer-based trip-reduction measures as strategies to be pursued by air districts in their attainment programs in 1991.

As I noted in my doctoral dissertation back in 1994, Regulation XV was wildly unpopular with large companies in Southern California and while it was not as objectionable to most employees (who could mostly ignore it or accept subsidies that companies were forced to offer them), it was, nonetheless, one of the most hated environmental regulations in California history.

Thanks to California’s Brown Act, the state’s pioneering sunshine law that requires public access to government meetings, employers, trade associations, and other regulatory critics could regularly vent their spleens about Regulation XV at public hearings of the SCAQMD governing board and the California Air Resources Board. Those review boards, with members appointed by the major political parties and governor, were influenced by the negative public relations stemming from these meetings and eventually watered down subsequent versions of the rule.

The change was also spurred by data emerging that showed the employer rideshare mandates weren’t working. For example, as my doctoral research showed, Hughes Aircraft Company, with over 40,000 employees in the region, spent up to $1 million per year to implement massively complicated rideshare incentive programs, only to see single-occupant commuting actually increase. Ultimately, Rule 1501 was de-fanged, and weakened, renamed as the innocuous “Rule 2202,” and largely disappeared from sight as a major bone of contention in California air quality regulations. There is a cautionary note here, however. Government regulations are much like vampires: they rarely die, they just go underground for a while before emerging again at a later date.

Using employers to coerce employees to overcome public resistance to government fiats is not new, but it is an ill-advised way for the government to exert its will under the cover of public health and safety rules. If the Biden administration moves ahead with employer-vaccination mandates through the Occupational Safety and Health Administration, it seems certain the backlash will continue to grow. Opposition to California’s rideshare mandate led to what may have been the first real popular revolt over an environmental public health regulation in the United States.

Mandates didn’t work for California’s environmental regulators then, and won’t likely work for the Biden administration now. President Biden’s COVID-19 vaccine mandate, no matter how well-intentioned to fight the pandemic, can only serve to further politicize and undercut public trust in workplace health and safety regulations and regulators. As legal analyst Walter Olson writes at Reason.com, Congress has armed OSHA “with grossly overbroad powers” but “courts have frequently struck down OSHA actions.” The Biden administration could save America from a lot of regulatory, legal and political fighting over its proposed COVID-19 vaccine mandate by recognizing how this mandate approach failed in California in the past.

The post California’s failed mandates offer some lessons for President Biden’s vaccine mandate appeared first on Reason Foundation.

A recent bipartisan proposal in Congress would allow more foreign health care workers to immigrate to the US to help combat the pandemic. The Healthcare Workforce Resilience Act (HWRA) would recapture up to 40,000 unused employment-based immigrant visas from prior years and allocate them to physicians and nurses. Specifically, the legislation would reserve 25,000 visas for nurses and 15,000 for physicians. The visas issued under the legislation would not be subject to any per-country numerical caps, and additional visas would be made available for spouses and unmarried children of the health care workers. Prospective recipients could petition for the visas up to 90 days after the end of the COVID-19 national emergency declaration. Temporary measures like the HWRA would be beneficial, but America’s aging population will result in physician shortages well beyond the pandemic, and permanent solutions are needed. 

America’s Looming Physician Shortage

According to projections from the Census Bureau, the population of people over the age of 75 will more than double in the next 40 years. Figure 1 below shows that over the same period, the population of people over 85 is expected to nearly triple.

Source: U.S. Census Bureau Population Projections 

Meanwhile, approximately 32 percent of physicians in the United States are already over the age of 60, and 51 percent of physicians are between the ages of 40 and 59. The median retirement age among physicians is about 65- years old, which suggests that a large share of America’s physician workforce is likely to think about retiring over the next decade.

The number of new health care workers entering the workforce may not be sufficient to offset the combined effects of the aging population and anticipated physician retirements. Figure 2 shows recent projections from the Association of American Medical Colleges suggesting the US could face a shortage of between 54,100 and 139,000 physicians by 2033. Allowing more foreign-trained physicians to practice in the United States could help alleviate this shortage.

Source: Association of American Medical Colleges 

The Role of Foreign Medical Graduates 

Immigrant physicians and nurses already play a significant role in the country’s health care workforce. A recent Organisation for Economic Cooperation and Development (OECD) report found that approximately 30 percent of physicians in the United States were foreign-born. However, it can be difficult for more foreign-born physicians to come to the US and practice medicine, especially if they received their training in other countries. 

Data limitations make it difficult to assess how many health care workers in each occupation arrive annually under various visa programs. However, the available data suggest that the US immigration system does not prioritize health care workers. For example, a report from the Migration Policy Institute stated that:

“Just 5 percent (or 4,771) of the 93,615 H-1B petitions approved for initial employment in fiscal year (FY) 2018 went to workers in occupations in health care and medicine, according to Department of Homeland Security (DHS) data. Fifty-one percent of annual H-1B petitions in FY 2018 went to workers in computer-related occupations.”

Expanding immigration opportunities for physicians would likely be beneficial given the anticipated shortage. However, doing so within the current immigration system would involve difficult tradeoffs and disadvantage other occupations. The challenge is that workforce needs and priorities vary across states. Some states may, in fact, benefit more from workers in tech-related occupations than from physicians. 

One solution to this problem is to grant states additional authority to determine their own immigration priorities based on their own workforce demands. Canada and Australia have implemented similar regional immigration programs that could serve as models.

Navigating limited immigration channels is only part of the problem. Foreign medical graduates (FMGs) must also obtain state-level licenses to practice medicine in the United States. Education requirements in the US are different than in most other developed countries, so FMGs often need to receive additional education and training––even if they have substantial experience working abroad.

Licensing requirements for foreign medical graduates can vary considerably from state to state. In general, FMGs are required to pass multiple exams, demonstrate English-language proficiency, obtain sub-specialty certifications, and complete a residency program in the US or Canada. If they wish to meet their residency requirement in the US, they must clear additional hurdles along the way. As the American Immigration Council explains: 

“First, the Educational Commission on Foreign Medical Graduates (ECFMG) must certify that the foreign national is academically prepared to enter a U.S. graduate medical education program (residency). Then, the physician must “match” into a U.S. residency program, in competition with U.S. medical graduates as well as other international peers.”

Residency program requirements can create significant bottlenecks for foreign medical graduates. In many cases, FMGs who completed residencies in other countries are required to repeat them because states may not recognize residency requirements in those countries. Moreover, match rates are considerably lower for foreign-trained physicians than US medical school graduates, leaving large numbers of otherwise capable FMGs unable to practice. In 2019 alone, more than 2,800 FMGs passed their required exams but were not matched with a residency program. 

Most states also require longer residencies for foreign medical graduates than for US medical school graduates and in many cases, these requirements are up to three times longer for FMGs. Holding foreign and US medical graduates to the same standards is a fairly modest reform that would present little risk in terms of quality. A 2014 paper pushed in Public Choice concluded that “over a third of all US states could reduce their physician shortages by at least 10 percent within 5 years just by equalizing migrant and native licensure requirements.”  

Many of the state-level pandemic responses point to opportunities for permanent reform. Early on in the COVID-19 crisis, several governors issued emergency orders that temporarily loosened restrictions on foreign medical graduates. New Jersey even granted temporary licenses to physicians already licensed in foreign countries. Unfortunately, the state is no longer accepting applications for these temporary licenses.   

Conclusion

The aging US population is expected to result in a growing shortage of physicians over the coming years. Inflexible immigration policies and onerous licensing requirements are exacerbating the problem by preventing foreign-trained physicians from practicing medicine in the United States.

The COVID-19 emergency responses at the state and federal levels have specifically recognized the importance of foreign-trained physicians. However, it would be a mistake to dismiss concerns about physician shortages after the COVID-19 crisis subsides. Lawmakers should build on the lessons learned during the pandemic and pursue permanent reforms to expand the physician workforce.  

The post COVID-19 Response Shows How America’s Physician Shortage Can Be Addressed appeared first on Reason Foundation.

In March, President Joe Biden proposed an additional $400 billion in Medicaid spending on home-based long-term care services as part of his $2.3 trillion infrastructure plan, the American Jobs Plan. Congressional Republicans have criticized the plan, citing its costs and very broad definition of infrastructure. Senate Republicans recently proposed their own nearly $1 trillion infrastructure plan as a counteroffer. 

Setting aside the semantics around infrastructure and the political feasibility of either plan, the idea of shifting resources toward in-home care has some merit.

Home and community-based services (HCBS) enable the elderly and people with disabilities to receive care in their homes rather than in institutionalized settings such as nursing homes. HCBS can be more cost-effective than nursing home care, and older Americans overwhelmingly prefer to receive care in their own home. 

Yet, federal Medicaid policy is biased toward nursing homes. State Medicaid systems are required to cover long-term care services in nursing homes, but most home and community-based services are optional to cover. Many states also cap the number of HCBS enrollees, resulting in waitlists. In 2018, 41 states had waitlists for HCBS waivers—totaling nearly 820,000 people with an average wait time of over three years.

The home health care industry is already facing significant workforce challenges. Low wages and poor benefits contribute to high turnover rates and make it difficult to fill some vacant positions. The majority of home-based care is provided by unpaid family caregivers. However, the caregiver support ratio (the number of potential family caregivers aged 45-64 available for each person aged 80 and older) is expected to decline over the next several decades, driving greater demand for paid home health care workers.

According to the Bureau of Labor Statistics, demand for these types of home health care workers will increase by 34 percent over the next 10 years, translating to more than one million job openings. Labor economist Paul Osterman estimates there could be a shortage of over 355,000 home health care workers by 2040. 

Source: Author’s calculations based on Census Bureau data. 

As the country prepares to serve its aging population, the Biden administration has identified legitimate problems in long-term care. The question, however, is whether an additional $400 billion in Medicaid spending is the best solution. It is not.

President Joe Biden’s $400 billion plan is a one-time cash infusion spread out over eight years that would do little to address structural problems in the long-term care industry. Instead, it would simply double down on a broken system by throwing more federal money at the problem.

Hopefully, the administration’s emphasis on long-term care will at least generate a much-needed conversation about the need to fundamentally rethink our current approach to long-term care.  

Reforming Long-Term Care Financing

Americans are largely unprepared to finance their long-term care needs. As a result, public spending—particularly through Medicaid—tends to dominate in the market for long-term care. In 2018, Medicaid accounted for 52 percent of all long-term care spending. Meanwhile, private insurance and out-of-pocket spending accounted for just 11 percent and 16 percent respectively. The remaining share came from other public and private sources, including the Veterans Health Administration, Children’s Health Insurance Program, and charities.  

The outsized role of Medicaid in long-term care financing is both straining government budgets and contributing to the lack of access to home-based care and the workforce shortages the Biden administration is aiming to address. Expanding the role of private payment sources would help rein in state and federal spending, expand access to home-based care, and increase wages for long-term care workers. 

Part of the problem is that Medicaid “crowds out” private long-term care insurance. As the Commission on Long Term Care noted in a 2013 report to Congress:

The structure of federal health care programs, particularly Medicaid, discourages individuals from taking responsibility for their future long-term care needs. Medicaid resources need to be more carefully targeted to those individuals the program was intended to serve—the needy and the poor.

The report pointed to several reforms that would restructure incentives and provide greater flexibility for insurers to design policies that are more affordable and sustainable. Tightening eligibility rules and strengthening asset recovery efforts, for example, could go a long way. 

A whole cottage industry of elder law attorneys exists to help wealthier Americans restructure their assets in order to qualify for Medicaid benefits. As a consequence, state Medicaid systems are stretched thin and provide insufficient coverage for those who truly need it. 

Medicaid payment rates for long-term care services are also often too low to cover costs, undermining the quality of care. Low payment rates effectively place a ceiling on wages for long-term care workers. For example, efforts to raise the federal minimum wage to $15 an hour received considerable pushback from home health care providers concerned that reimbursement rates would not be raised accordingly. 

Rethinking our approach to long-term care financing and placing a greater emphasis on private payment is a necessary step to addressing the workforce challenges in the long-term care industry.

Without more careful targeting of Medicaid eligibility, increasing reimbursement rates would lead to even higher costs for state and federal governments. Rising Medicaid expenditures would compete with other spending priorities such as education and transportation. Those budget concerns have already motivated states to cap the number of Medicaid home and community-based services (HCBS) waivers they offer, leading to long waiting lists for home-based care. Again, expanding the role of private payment sources would help solve the problems identified by the Biden administration. Achieving meaningful reform in this area would be a significant undertaking, but would be far more beneficial than merely prolonging the status quo.

Regulatory Reforms to Expand Access to Home-Based Care 

Aside from issues with financing long-term care, there are a number of regulatory reforms that could expand access to home-based care while reducing costs for consumers. These reforms would have a substantial impact on long-term care services, and many could be pursued by states regardless of action at the federal level. 

Federal Medicaid rules aren’t the only source of bias toward institutionalized care over home-based services. State-level certificate of need (CON) laws limit the growth of home health services, pushing more seniors into nursing homes. Certificate of need laws require prospective care providers to demonstrate that there is an unmet need in the community before establishing or expanding health facilities or services. Currently, 14 states impose CON requirements on home health agencies. 

Research suggests that certificate of need laws serve to limit competition and prevent the expansion of home health industry capacity. The authors of a 2016 paper on the effect of CON laws on Medicare and Medicaid spending on nursing home care and HCBS concluded that CON laws “act as a direct impediment of expansion of home- and community-based care” and “provide nursing homes with some degree of market power that does not allow the market to respond freely to price changes or federal policies.” Other research suggests certificate of need requirements are associated with lower quality ratings among home health agencies.

Increasing the use of telehealth in home settings would also be beneficial for those seeking to receive long-term care in their homes. Telehealth allows patients to connect with health care providers remotely via telecommunications or digital communications technologies. For example, various wearable devices and monitoring systems enable care providers to track patients’ health status and mobility. The technology can also be used by aides and family caretakers to consult specialists without requiring an in-person visit. Innovative care models that rely on telehealth have the potential to alleviate workforce demands, reduce costs, and improve patient outcomes. 

Unfortunately, state and federal regulations can present an obstacle to the use of telehealth. At the federal level, outdated laws that are intended to protect patient privacy haven’t kept pace with technological innovation. These rules may hinder the use of some communications and remote monitoring technologies. At the state level, licensing laws may limit the ability of providers to practice telehealth across state lines. State laws may also create unnecessary hurdles to establish a patient-provider relationship. These requirements can make it difficult for providers to prescribe medications via telehealth without an initial in-person visit––a potential challenge for many home-bound seniors. Lawmakers should consider reforms that would maximize flexibility in the use of telehealth technologies and avoid policies that could inhibit future innovation. 

Expanding the role of direct care providers could also reduce costs while providing a channel to raise wages. Currently, home health workers are very limited in terms of what they can do on the job due to what is referred to as their scope of practice (SOP). State-level scope of practice restrictions prevent home health aides from performing many routine tasks, such as administering eye drops or oral medications. According to the MIT Sloan School of Management’s Paul Osterman, expanding the SOP of home health workers could go a long way toward improving the quality of their jobs and increasing the efficiency of care delivery. Osterman argues that allowing these workers to take on more responsibilities would help boost their wages. Even with higher wages, these reforms could reduce overall costs by shifting some tasks away from higher-paying occupations such as registered nurses. 

Expanding the Home Health Workforce 

While raising wages and leveraging innovative technologies could alleviate some pressure on the long-term care workforce, the existing labor pool may still be insufficient to meet future demands. Expanding immigration opportunities for long-term care workers offers a solution.

Immigrant workers already play a critical role in the long-term care workforce. In fact, nearly 1 in 4 long-term care workers are foreign-born. Among those, about half are naturalized citizens, and 34 percent are legal non-citizen immigrants. The remaining 16 percent of foreign long-term care workers are undocumented, although that number could be higher than is reported in the official data. 

Despite the importance of immigrant workers in the long-term care workforce, they typically don’t qualify for employment-based visa programs. Instead, most immigrant long-term care workers come to the United States on family-sponsored, refugee, or diversity visas. Some visas are targeted toward “skilled” workers that include many professional health care occupations such as physicians and advanced practice registered nurses. However, long-term care aides are not considered skilled workers under these programs. 

In general, foreign-born workers––particularly women––are more likely to enter the long-term care workforce than native-born workers. Therefore, any reforms that increase the number of low-skill immigrants would likely be beneficial. Efforts to recruit recent immigrants into the long-term care workforce could amplify this effect.

Creating a state-based visa system would decentralize decisions about which types of workers should be prioritized by immigration policy. Under such a system, states could allocate visas according to their own workforce needs rather than rely on federal bureaucrats’ definitions of “skilled” or “unskilled.” The current one-size-fits-all approach pits the interests of states against each other, resulting in unnecessary conflict and, in some cases, a mismatch between supply and demand for different types of immigrant workers. Canada and Australia have implemented similar regional immigration programs that could serve as models. 

Alternatively, lawmakers could pursue reforms specifically targeted toward bolstering the long-term care workforce. One solution proposed by long-term care advocates is to create a new guest-worker program that would extend temporary visas to qualified, English-speaking, foreign-born workers hired to positions that cannot be filled by native-born workers. The workers would be admitted for a fixed, three-year period that could be renewed one time for a total of six years. Another solution would be to simply include long-term care workers under existing skilled worker programs. 

Such reforms may experience newfound support in light of the COVID-19 pandemic, which has highlighted workforce shortages across the health care industry. For example, a recent bipartisan effort in Congress would recapture 40,000 unused visas and allocate them to foreign-trained physicians and nurses to help combat the pandemic. As those shortages continue to grow in the coming years, more permanent efforts may gain similar traction among lawmakers. It is essential that lower-skilled long-term care occupations not be excluded from potential reform efforts.

Whenever lawmakers decide to act, it is clear that the long-term care workforce would benefit from immigration reform. Moving forward, policy debates surrounding both immigration and long-term care reform should consider the relationship between the two.

Conclusion

President Joe Biden’s recent proposal identifies some of the right problems facing the long-term health care services but, unfortunately, does not offer meaningful solutions to the challenges posed by a rapidly aging population. Rather than simply throwing more money at the problem, tackling the looming long-term care crisis will require thoughtful, meaningful policy reforms. 

The most significant challenge to the industry is to rethink the current approach to financing long-term care services. Reducing the role of Medicaid in favor of private payment would help expand access to health care and alleviate workforce pressures by increasing wages. 

Regulatory reforms could expand the supply of home-health providers, unlock the potential of technological innovation, and better leverage the role of home-health workers.

Immigration reform would also expand the home-health workforce to prevent future shortages. 

Combined, these policy reforms would help address the structural problems affecting the home-health care industry while improving access, reducing costs, and giving home-health workers a much-needed pay raise. The scale of the challenge presented by America’s aging population demands such comprehensive solutions, not just a massive influx of federal dollars. 

The post Addressing America’s Aging Population and Long-Term Health Care Crisis appeared first on Reason Foundation.

State-level certificate of need (CON) laws require health care providers to receive government approval to construct new facilities, expand existing ones, or offer new medical services. To gain approval, health care providers are often required to demonstrate that there is an unmet need for additional capacity. However, existing providers–who have an interest in limiting competition–may block new entrants and competitors by arguing that there is no additional need.

New York became the first state to enact a certificate of need law in 1962. Over the next decade, 26 other states adopted CON laws. Further expansion of certificate of need laws occurred in response to the National Health Planning and Resources Development Act of 1974. The act conditioned federal funding on the enactment of CON laws. By 1982, every state except Louisiana had some form of certificate of need program.

These certificate of need laws were promoted under the misguided notion that unregulated competition could lead to unnecessary spending and increase health care costs. This line of reasoning is, in part, based on the work of Milton Roemer, a public health professor at the University of California—Los Angeles. Roemer observed that the rate and length of hospital stays were greater in regions with a higher number of hospital beds per capita. Based on this observation, Roemer concluded that, in an insured population, an increase in the supply of hospital beds creates ‘induced demand’ for hospital services. In other words, “a bed built is a bed filled.” Roemer’s work was so influential that this theory came to be known as Roemer’s Law.

Following the logic of Roemer’s Law, certificate of need laws were initially intended to slow the growth of health care costs by restricting the supply of services. However, ample evidence suggests that CON laws have failed to accomplish the goals of preventing over-investment and reining in health care costs. CON laws instead serve as an anti-competitive barrier to entry and are actually associated with increased costs, lower quality, and reduced access to care.

Since the federal mandate was repealed in 1987, several states eliminated or modified their certificate of need laws, but 35 states and the District of Columbia maintain some form of CON program.

Experiences during the COVID-19 pandemic have prompted some of these states to consider certificate of need reform. The ideal reform for each state is to fully repeal CON requirements for all facilities, equipment, and services. However, full repeal can be politically challenging given the strong interest and lobbying power of incumbent health care providers in the market.

Incremental reform may be more feasible for legislators. Matthew D. Mitchell and his colleagues at the Mercatus Center have identified several reform options that states should consider. For example, many states have opted to repeal portions of their certificate of need laws while maintaining CON requirements for some facilities and services. Lawmakers could begin with CON laws for facilities and services that provide low-cost care, serve particularly vulnerable populations, or are least likely to be overprescribed.

Where CON requirements are maintained, efforts should be made to ensure that approval processes are subject to transparency and accountability. States should disclose the percentage of applications that are approved and denied. Total application fees, attorney fees, and litigation costs should be reported so that lawmakers and the public are aware of the costs associated with CON laws. Care should also be taken to ensure that CON review boards are not dominated by industry insiders or individuals with financial ties to existing providers in the market.

While these and other incremental approaches would be beneficial, some potential reforms would be counterproductive. For example, states should avoid creating formulas to determine need. While this may appear less susceptible to capture than subjective assessments of need, formulas are often designed to achieve utilization targets that protect incumbent providers from competition.

Lawmakers should also avoid replacing certificate of need programs with similar restrictions on construction. As research on the effects of CON laws indicates, supply constraints are not an effective means for reining in health care costs. Any form of a moratorium, quota, or need-based planning is short-sighted and counterproductive to the intent of CON reform.

Finally, lawmakers should be wary of replacing certificate of need laws with policies that are intended to encourage construction in certain communities or that require providers to serve particular populations. Research suggests that CON requirements reduce access in rural areas and do not promote indigent care. Therefore, CON repeal does not necessitate additional requirements that could have unintended consequences. The essence of CON repeal is the recognition that centralized planning is not more capable of determining the optimal distribution of health care resources than investors and market forces.

While several states wisely suspended their certificate of need laws in response to the COVID-19 pandemic, permanent reform is still necessary. Lawmakers have a variety of options in addition to full repeal, but they should be careful to avoid policies that would continue to limit access to health care.

The post COVID-19 Pandemic Highlights Why States Should Do Away With Certificate of Need Laws appeared first on Reason Foundation.

Municipalities across the country are addressing this problem by experimenting with alternative approaches to dealing with mental health crises and 911 calls. Many reform efforts are promising, but some of their efficacy may be hampered by poor implementation, lack of resources, or budgetary constraints. Telehealth can alleviate some of these challenges and should be considered a tool to help bridge the divide between law enforcement and mental health services.

Telehealth enables law enforcement to connect with health care professionals remotely via telecommunications and digital communication technologies.  Police officers generally lack the training and resources to respond appropriately to emergency calls involving individuals with mental illness. Consequently, individuals with untreated mental illness are 16 times more likely to be killed during a police encounter than those without mental illness according to data from the Treatment Advocacy Center. Even when interactions are not fatal, they can result in unnecessary physical trauma, arrest, and incarceration.

Many situations involving mental illness would be better addressed through health care rather than criminal punishment. Non-violent incidents related to public decency or disorderly conduct, for example, may not warrant a response from law enforcement. However, police officers are often the first to respond to these types of calls. Under those circumstances, officers have generally faced a decision between three options:

1. Do nothing, leaving the individual in crisis and the public unserved;
2. Make an arrest, perpetuating the alarming rate of incarceration among those with mental illness; or
3. Initiate an involuntary psychiatric hold, subjecting the individual to a period of involuntary confinement in a treatment facility

Overreliance on law enforcement in these situations places undue demands on police officers and diverts limited resources away from more serious criminal concerns. Substituting or augmenting law enforcement in response to individuals experiencing mental health crises can alleviate some of this burden.

Several municipalities have deployed specialized teams to handle mental-health-related emergency calls. Specific approaches vary, but in general, these teams may consist of specially trained police officers, health care professionals, or both. Evidence on the impact of these reforms is somewhat mixed but suggests they can be successful when implemented well.

However, it is not always feasible for local governments to implement these sorts of programs. It may be difficult to determine the appropriate response before an officer is on the scene. Moreover, uncertainty about the nature of certain situations could raise legitimate safety concerns for unarmed personnel. Rural and financially stressed communities may also lack the financial or workforce resources necessary to employ or contract with health care and social work professionals.

An innovative approach using telehealth to connect police officers with mental health services could alleviate some of these barriers to reform. Pilot programs have been initiated in multiple states including Texas, Florida, and South Dakota. Typically, the programs equip officers with tablets that can be used to contact mental health professionals via audio and video. The technology enables mental health professionals to interact directly with individuals experiencing mental distress. Mental health professionals may also aid officers by providing guidance and identifying available resources.

In 2017, the Harris County Sheriff’s Office launched the Clinician and Officer Remote Evaluation (CORE) Pilot Program. An analysis of the CORE program in 2019 conducted by the University of Houston—Downtown showed promising results. When surveyed, 86 percent of officers answered that the clinician/psychiatrist helped safely de-escalate the individual in distress. Ninety-three percent said the clinician/psychiatrist helped them decide what course of action to take.

The CORE program has also been effective at avoiding transportation to emergency rooms and criminal detention facilities. Approximately 42 percent of CORE calls in 2019 were resolved on scene. Officers indicated that, in the absence of CORE, these calls would have likely resulted in transportation to an emergency room. Only two calls resulted in transportation to a jail or detention center.

More recently, police departments in Florida and South Dakota have adopted similar programs. In Florida, the Largo and Belleair police departments have adopted the Telehealth Remote Access to Crisis Evaluation (TRACE) program. Since November 2020, the number of involuntary psychiatric holds initiated by the Largo Police Department has decreased by 50 percent. Similarly, twenty-three counties in South Dakota began the Virtual Crisis Care pilot program in July 2020.

If telehealth programs continue to produce such promising results, other municipalities should consider implementing similar approaches. While in-person models may prove to be more effective, telehealth could nonetheless be another tool to address mental-health-related interactions with police. Given the complexity of the problem, policymakers should ultimately seek to provide law enforcement and mental health professionals with as many options as is practicable.

Of course, these types of policing reforms are only part of rethinking the punitive treatment of mental illness in the United States. Additional measures are required to provide treatment before mental health issues reach the point of crisis.

The post How Telehealth Services Can Help Address Mental Health Issues and Police Reform Efforts appeared first on Reason Foundation.

A patchwork of regulations normally limits the use of telehealth in states across the country. However, emergency actions in Louisiana and several other states have allowed telehealth use to increase dramatically throughout the pandemic.

As Eric Peterson and I explain in a new report published by Reason Foundation and the Pelican Institute, there are many ways to improve Louisiana’s telehealth laws and ensure that telehealth remains a viable option for patients and health care providers after the pandemic subsides.

One of the principal benefits of telehealth is the fact that it enables patients to connect with providers across vast distances. Unfortunately, outdated state licensing schemes often prevent health care professionals from providing telehealth services across state lines. In 2008, state lawmakers passed legislation that allowed out-of-state physicians to practice telemedicine without obtaining full Louisiana licensure. The legislation directed the Louisiana State Board of Medical Examiners to issue special “telemedicine licenses” to physicians licensed in other states.

Similar reforms in 2014 allowed other licensing boards, such as the Louisiana State Board of Nursing, to establish telehealth rules–including rules that would allow out-of-state non-physician health professionals to provide telehealth services to patients in Louisiana. However, the legislation merely provided licensing boards the option, rather than the mandate, to issue rules related to telehealth. Consequently, only seven of the 25 provider types mentioned in the act have any rules governing the practice of telehealth. Of those, only Speech-Language Pathologists and Audiologists have an out-of-state registration process.

Rather than allowing greater flexibility, the lack of rulemaking means that there is little guidance on telehealth for most providers. This creates an uncertain environment for those seeking to provide services in the state and unnecessarily limits patients’ access to care. Additional legislative action is required to provide clarity and expand out-of-state registration to all providers.

New applications of telehealth are constantly emerging, but regulation often fails to keep pace with innovation. In Louisiana, outdated rules and definitions limit the range of telehealth services available to patients and providers. Louisiana law distinguishes between the terms “telehealth” and “telemedicine” even though the terms are often used interchangeably. In general, the state uses the term telemedicine in reference to services provided by physicians. Telehealth, on the other hand, refers to services provided by non-physician health professionals such as nurse practitioners. Combined with a delegation of rulemaking authority, this unnecessary distinction has resulted in overly complicated telehealth policies that create significant disparities between health care providers.

Louisiana’s telehealth policies also present barriers to the use of telepharmacy and important asynchronous store-and-forward technologies.

The state currently allows prescription dispensation through telepharmacy dispensing sites staffed by pharmacy technicians who are overseen by a central pharmacy through telecommunications technology. These sites expand access to pharmacy services in areas without an adequate supply of pharmacists. However, Louisiana law prohibits telepharmacy dispensing sites from operating within 15 miles of another pharmacy. This restriction allows the use of telepharmacy dispensing sites where they are needed most but may unnecessarily limit access in some areas.

Asynchronous store-and-forward technology refers to the digital transmission of health data or information—such as x-rays, MRIs, or photos of skin conditions—between patients and health care providers. Importantly, these interactions do not need to happen live. A patient can send or upload documents for later review by their care provider. Right now, Louisiana’s differing definitions of telehealth and telemedicine complicate the use of store-and-forward technologies. The state’s definition of telehealth includes asynchronous store and forward but the state’s definition of telemedicine includes the “transfer of medical data,” through the use of two-way video and audio transmissions. As a result, non-physician providers are able to use asynchronous technologies, but physicians in Louisiana may not.

Telehealth use has skyrocketed during the COVID-19 pandemic, but its value isn’t limited to times of crisis. Telehealth has the potential to expand access to care and reduce costs, particularly in rural areas and underserved communities. Unfortunately, outdated regulations may hamper the use of telehealth going forward.

Louisiana could improve its telehealth policies by increasing clarity, eliminating disparities between physician and non-physician providers, reducing barriers for out-of-state providers, and recognizing all potential forms of telehealth. Adopting such reforms would ensure that telehealth remains a valuable tool for providing care to those in greatest need.

Full Policy Brief: Medicine in a Digital World—Ensuring Permanent Access to Telehealth Care in Louisiana 

The post Telehealth Reforms Could Expand Access to Health Care in Louisiana appeared first on Reason Foundation.

However, state-level scope of practice restrictions often prevent these non-physician providers from practicing to the full extent of their educations and training.

The American Association of Medical Colleges (AAMC) workforce modeling includes several potential scenarios. The “status quo” scenario assumes a continuation of current trends in workforce entry, hours worked, and retirement. Under this scenario, they say the shortage of primary care physicians will increase to 51,200 by 2033.

Increasing the role of advanced practice registered nurses (APRNs) and physician assistants (PAs) in the delivery of care could reduce demand for primary care physicians. The precise degree to which the labor of APRNs and PAs can be substituted for the labor of physicians is unknown. Therefore, the AAMC models two scenarios that assume different rates of substitution. Assuming a high rate of substitution (50 percent in primary care), the AAMC projects a surplus of 6,700 primary care physicians in 2033.

While 50 percent is the highest substitution rate included in AAMC’s modeling scenarios, research suggests that it is actually a fairly conservative estimate. In fact, a recent critique of the AAMCs methodology published in the Journal of the American Academy of Physician Assistants notes that “the weight of evidence points to a reasonable primary care substitution ratio at or above 75%.”

It is important to note that the potential “surplus” indicated by the AAMCs modeling does not suggest a surplus in the way economists use the term when discussing labor markets. The AAMC model uses 2018 as the base year and forecasts the number of physicians required to maintain the same level of care given expected demographic changes and entry into the labor market. Any projected shortages or surpluses are relative to 2018 rather than a calculated market equilibrium. In other words, a projected surplus would likely result in a higher level of care relative to 2018 rather than a glut of unused physicians. Additionally, as the Niskanen Center’s Robert Orr writes, “A surplus of physicians will exist when prospective medical students forgo the profession in favor of more attractive opportunities. Any other definition is either confused or dishonest.”

While advanced practice registered nurses and physician assistants could offset projected shortages, state-level scope of practice restrictions limit their ability to provide many services traditionally provided by physicians—even if they possess the necessary education and training. Scope of practice refers to the range of services that a healthcare professional is allowed to provide. For example, many states limit the ability of PAs and APRNs to prescribe medications, admit patients, and sign certain medical documents.

Nearly every state requires PAs to work under the supervision of, or in collaboration with, a physician. State laws regarding the supervision of APRNs are less consistent and vary by APRN specialty. There are broadly four types of APRNs, with nurse practitioners (NPs) being the most readily substituted for primary care physicians. About half of the states across the country allow NPs to practice independently without physician supervision.

Ample research suggests that loosening scope of practice restrictions can expand access to care and reduce costs without compromising on the quality of care. For example, a study published in the Journal of Law and Economics found that more restrictive scope of practice policies resulted in 3 percent to 16 percent higher costs for well-child visits with no difference in quality or safety. Another 2017 study conducted by various experts in the field concluded that “state regulations restricting NP SoP do not improve the quality of care.”

Physician groups have raised concerns about allowing advanced practice registered nurses and physician assistants to practice unsupervised. While there is little empirical evidence to suggest independent practice by APRNs and PAs reduces the quality of care, policymakers may nonetheless be wary of eliminating requirements.

To mitigate this uncertainty, several states that allow independent practice require a transition period before a non-physician provider is allowed to practice independently. Requiring a reasonable period of supervision, similar to residency requirements for physicians, could be a prudent measure to ensure APRNs and PAs are adequately experienced before they pursue independent practice.

As the AAMC modeling suggests, expanding the role of advanced practice registered nurses and physician assistants could offset the looming shortage of physicians. Of course, physicians are the most highly trained health care professionals and play a critical role in health care delivery. That is precisely why states should allow them to focus on the patients that need their attention most.

While further policy reforms may also be necessary to increase the supply of physicians, there is no good reason to prevent advanced practice registered nurses and physician assistants from practicing to the full extent of their training and education.

The post Physician Assistants and Advanced Practice Registered Nurses Could Offset Physician Shortage appeared first on Reason Foundation.

In early 2020, total outpatient visits declined dramatically nationwide, but the increased use of telehealth made up for some of the gaps in care. The shaded area in Figure 1 below reflects this increased use of telehealth. In Florida, total weekly visits declined by 24 percent last year between May 20 and June 16. Over that same period, telehealth visits accounted for 17.4 percent of total visits in the state.

A patchwork of state and federal regulations normally governs interactions between health care workers serving their patients via telehealth. But emergency actions by the federal government, as well as temporary changes to various state laws, have temporarily eliminated or reduced regulatory barriers to the use of telehealth across the country during the pandemic.  Prior to these actions, varying definitions of telehealth, onerous licensing restrictions, and other outdated regulations limited telehealth adoption by patients and care providers.

Fortunately for Floridians, lawmakers in the Sunshine State recognized the potential tradeoffs associated with health care regulation before the coronavirus pandemic began. In 2019, the Florida legislature enacted a significant improvement to Florida’s telehealth policies. The reforms created a unified definition of telehealth, altered rules around insurance coverage of telehealth services, and authorized a wide range of health care professionals to engage in telehealth services.

The 2019 reforms also required licensing boards to create a telehealth registration process for out-of-state providers. The registration process allows providers licensed in other states to practice telehealth in Florida without obtaining an additional Florida license. Allowing out-of-state providers to practice telehealth in Florida will help offset the growing demand for health care services as Florida’s population continues to grow and age.

Yet, as Sal Nuzzo and I explain in a new report published by Reason Foundation and the James Madison Institute, there are many ways to improve Florida’s telehealth laws.

Registered out-of-state telehealth providers are required to work within their scope of practice (SOP) as provided by Florida law––even if they are licensed in a less restrictive state. Scope of practice refers to the range of services that a health care professional may provide. This creates an unnecessary burden for out-of-state providers who must maintain knowledge of SOP provisions in their state and in Florida. Short of expanding SOP requirements in Florida, allowing these providers to practice within the SOP provisions of their state of residence would reduce this burden and expand access to care.

There are many technologies through which patients can access telehealth. Decisions regarding how telehealth services are delivered are best left to the discretion of patients and their providers. Therefore, definitions of telehealth should be broad and allow for future innovation.

For example, Florida’s definition of telehealth explicitly excludes audio-only phone calls, emails, and facsimile (fax) transmissions. Including these and other common forms of remote communication would provide greater flexibility to patients and care providers.

While telehealth services are covered for most Florida Medicaid beneficiaries, Florida’s Medicaid fee-for-service (FFS) delivery system provides more limited telehealth coverage than the Statewide Medicaid Managed Care program. Reimbursements through Florida Medicaid should be expanded to include all potential forms of telehealth.

Regarding private insurance, Florida’s current policy strikes the right balance between promoting the use of telehealth and preserving its cost-savings potential. Some telehealth advocates suggest that requiring private insurance companies to reimburse for telehealth services at the same rate as in-person services would incentivize more providers to adopt telehealth. Lawmakers should resist the pressure from telehealth industry advocates and avoid interfering with negotiations between providers and private insurers.

Finally, lawmakers should avoid preemptively restricting the uses of new technologies as they emerge.

Consumer electronic devices are increasingly capable of collecting health data and providing information to patients and their health care providers. For example, wearable devices like smartwatches can gather information about patients’ fitness, activity levels, and heart rates––and even more complex measurements like blood oxygen levels. Emerging technologies like this promise to bring patients closer to their care providers, but their potential could be thwarted by misguided rules and restrictions.

The COVID-19 pandemic has demonstrated the value of flexibility and innovation in the health care sector. Unfortunately, outdated and overly restrictive regulations may limit the potential of telehealth after the public health crisis subsides.

Improvements to Florida’s telehealth policies that increase flexibility, expand choice, and allow for permissionless innovation would ensure that telehealth continues to expand access to care in Florida.

Full Report: Expanding Access to Telehealth in Florida 

The post How to Improve Access to Telehealth in Florida appeared first on Reason Foundation.

SARS-Cov-2, the coronavirus at the origin of the COVID-19 pandemic, provides a good opportunity to review different models of public health. These models range from protection against epidemics of contagious diseases up to social justice. Based on different methodologies and different theories of the social world, the various meanings of public health lead to very different prescriptions for government intervention and public policy—including in a pandemic like the current one.

As Ilona Kickbusch says, “We have reached a point where we need to make a choice of what kind of model of global public health we want to promote.”

This paper addresses a double question: What are the main concepts and models of public health? To which extent do public health considerations require government intervention?

“In many respects,” says a major textbook of public health, “it is more reasonable to view public health as a movement than as a profession.”

Since a movement is based as much on ideology as on rational inquiry, understanding it requires a grasp of its ideological beliefs. This is especially true in the current emergency, where the movement and its experts claim more influence on public policy. Moreover, the foundations of public health have changed through history, especially in modern history, which provides another reason to consider its different models.

This paper addresses four models of public health.

Part 2 considers the concept of public health as an instance of what economists call public goods. The nature of public goods is reviewed as it relates to different means of protection against epidemics, including immunization when available. It can be argued that this economic approach corresponds historically to the “old public health,” as opposed to today’s “new public health,” even if the history of public health has not been linear.

Part 3 explores public health as government medical care. Public health as a public good can easily drift to this newer concept, as “public” can be taken to mean “governmental” and “health” to mean “medical care.” This part of the paper explores how public health came to be understood as government medical care at different moments of history.

In the expression “public health,” “health” can have many meanings. Depending on how expandable the term is, government health care can become very expansive, up to total government care, the model reviewed in Part 4. Of course, “total” cannot be taken literally, but it will be seen to represent an ideal for the public health movement. This drift of public health was typical of the 20th century. This part will examine how a new definition of health, as well as a new conception of “public”, led to the “new” public health.

Part 5 explores the feasibility of the opposite model of public health: voluntary cooperation. The question is: Can vaccination decisions or measures to control an epidemic be left to the domain of private choices? This part of the paper will also examine the limits of coercion, which suggest both that the total government care is infeasible (at least, in a free society) and that voluntary cooperation should be considered.

The conclusion will advance some broad policy orientations, organized around a presumption of liberty and the general goal of minimizing coercion.

Any rational public policy must deal with the questions raised by the different models of public health. By sketching an economic approach that is too often missing in discussions of public health, the paper hopes to contribute to a better understanding of the issues involved and, hopefully, to better public policy. That the label “public health” can mean, and has historically meant, many different things should always be kept in mind.

Full Policy Study—Public Health Models and Related Government Interventions: A Primer

The post Public Health Models and Related Government Interventions: A Primer appeared first on Reason Foundation.

Due to factors including aging patient populations and doctor retirement rates, the U.S. is expected to see a shortage of between 54,100 and 139,000 physicians by 2033, according to a recent report from the American Association of Medical Colleges. Among the states predicted to be hardest hit by the shortfall are Louisiana, Mississippi and New Mexico.

To address the public-health problems the current shortage has caused during the pandemic, some states have temporarily allowed out-of-state doctors to practice within their borders with little to no additional training or certification. State policymakers now have a great opportunity to make the temporary permanent.

Since 1847, the American Medical Association has lobbied every state to enforce their own medical-licensing laws, with peripheral federal oversight, even though licensing qualifications to practice medicine are generally dictated by national specialization organizations such as the American Board of Surgery and are practically identical from state-to-state. Such consistency should make state-level licensure redundant and unnecessary.

However, until recently, doctors were unilaterally barred from practicing in states where they had not been licensed. They couldn’t even provide telemedicine support to patients beyond their state borders. These laws were defended on the grounds that they promote safety, but as with most professional licensing laws, the real motivation was, at least in part, money. Medical boards have used licensing regimes to rake in over $100 million annually in certification and testing fees from aspiring doctors.

When the COVID-19 crisis hit the U.S. health-care system last year, the limitations of state licensing quickly became apparent. Hospitals in regions with high COVID-19 case numbers were in desperate need of more physicians, and the temporary relaxation of cross-state licensing restrictions enabled hard-hit hospitals to staff up quickly to better cope with surges in COVID cases. As a result of this successful experiment born of crisis, even the AMA is now beginning to support the idea of universal licensing within the United States.

One state is pointing the way to more sensible licensing regimes. Utah has not only permanently opened its doors to doctors from other states but also implemented policies to speed up their licensing processes. In fact, Utah has been at the forefront of medical access for years, even allowing doctors licensed in Canada to practice within its borders since 2014.

And the state has continued to build on these sensible policies: Anticipating the COVID-19 hospitalization surge in late March 2020, Gov. Gary Herbert signed legislation to streamline licensing in nearly all non-medical fields. That freed up resources for Utah’s Division of Occupational and Professional Licensing to focus on approving new doctors who wanted to work in the state, and division staff were able to approve 22 percent more doctors in 2020 compared to 2019. It’s likely that these additional doctors are contributing to Utah’s low COVID-19 death rate, currently the nation’s sixth-lowest.

Technically, Utah is willing to license doctors certified in any country, but the state gives preferential treatment to Canadian-certified doctors because that country’s licensing requirements are so similar to those in the United States. Non-Canadian foreign doctors still must complete two years of Utah medical residency before they can practice in the state. Many other states require Canadian doctors to complete this two-year residency as well, but Utah’s policy has allowed a number of Canadian doctors to treat COVID-19 patients in the state immediately.

But why stop at Canada? New Jersey did temporarily allow physicians from other countries to practice in the state at the start of the COVID-19 pandemic. Unfortunately, the state has already suspended new applications, but such provisional licensing for all foreign doctors should be the next step for all states.

The COVID-19 pandemic has shed light on regulations that have prevented the U.S. health-care system from operating as efficiently as possible. States with immediate physician needs amid the pandemic, and those expecting to see doctor shortages in the coming years, should follow Utah’s lead. It’s never been more important to allow doctors to practice where they are most needed.

A version of this column previously appeared in Governing. 

The post How State Policies Are Worsening The U.S. Doctor Shortage appeared first on Reason Foundation.

The Florida Agency for Health Care Administration’s health finder website shows 29 nursing homes in Sarasota County, though more may be unlisted. ProPublica’s Nursing Home Inspect website, which “compares nursing homes based on the deficiencies cited by regulators and the penalties imposed in the past three years,” includes 22 facilities in Sarasota County, all of which had moderate to severe deficiencies.

The tragedy unfolding in America’s nursing homes highlights the need to address long-standing failures in the industry. A new policy study authored by one of us, Protecting Florida’s Most Vulnerable: Market-Based Reform to Improve Nursing Home Care, published this month by the James Madison Institute, offers recommendations for reform.

Between state and federal requirements, nursing home care is among the most highly regulated industries in the United States, but quality issues remain rampant. Considering the vulnerability of nursing home residents and the potential for neglect and abuse, some degree of regulation and oversight is necessary and appropriate. However, policymakers must acknowledge the limitations and tradeoffs associated with regulation.

Importantly, regulation only establishes minimum standards of care—it does not provide incentives to go beyond those minimum standards. As in any other industry, the best mechanism to create incentives to improve quality is competition. Unfortunately, state-level policies often restrict competition in the nursing home industry.

For example, state-level certificate of need (CON) laws require health care providers to receive government approval in order to construct new facilities, expand existing ones, or offer new medical services. These laws were implemented under the misguided theory that restricting supply would control health care costs by preventing over-investment. However, the bulk of evidence suggests that certificate of need laws do not achieve this goal.

Several states, including Florida, have repealed or reformed their certificate of need programs in recent decades. In 2019, Florida passed CS/HB 21, which eliminated CON laws for general hospitals, comprehensive rehabilitation, specialty hospitals, and tertiary health services. CON requirements were maintained for nursing homes, skilled nursing facilities, hospice programs, and intermediate care facilities for the developmentally disabled.

Despite overwhelming evidence that CON laws do not reduce health care costs, proponents argue that limiting the number of nursing home beds will control Medicaid costs. However, that assertion is not supported by research on the subject. A 2016 study in the journal Medical Care Research and Review found that while nursing home Medicaid spending per enrollee declined in all states between 1992 and 2009, the rate of decline was actually higher in states without CON laws. As the authors noted, “by 2009, compared to states without CON, Medicaid spending per enrollee on nursing home care was 1.8 times higher in states with nursing home CON.”

Proponents of the nursing home certificate of need laws also argue that the requirements improve quality by ensuring high occupancy rates. They suggest that eliminating Florida’s CON program would lead to a dramatic increase in the number of nursing home facilities and beds. As a result, facility occupancy rates would decline, revenues would fall, and care providers would be unable to cover the costs required to provide quality care, they claim. Again, the available research does not support these claims.

A September study in the journal Healtcare found that both CON requirements and higher occupancy rates are actually associated with lower quality of care. The authors used scores from the National Nursing Home Survey, which measures facility cleanliness, staffing adequacy, and satisfaction ratings from a sample of residents in each facility. After controlling for other relevant factors, the authors found that survey scores are about 18 to 24 percent lower in states with CON requirements. Moreover, a one-point increase in the occupancy rate was found to result in a 0.5 percent reduction in survey scores on average.

While certificate of need laws do not achieve their goals of reining in costs or improving quality, they do have significant distortionary impacts that benefit incumbent care providers to the detriment of consumers and potential competitors. For example, Florida’s CON program tends to lead to older, larger nursing facilities by protecting existing providers from competition and favoring expansions over the construction of new, state-of-the-art facilities. As a result, over 30 percent of Florida’s nursing homes were built before 1981 and about 16 percent are over 50 years old.

Florida also tends to have larger facilities on average than other states, especially compared to those without certificate of need requirements. Data from the Kaiser Family Foundation indicate that Florida has approximately 120 beds per facility compared to the national average of 106 beds. States with certificate of need laws have an average of 101 beds per facility while states without certificate of need laws have an average of 89 beds per facility. This is important because research by the Kaiser Family Foundation suggests that smaller facilities tend to be associated with higher quality than larger facilities.

In sum, the evidence indicates that certificate of need laws may actually be counterproductive to the goals of reducing costs and improving quality. They also protect incumbent care providers from competition that would otherwise create incentives to improve quality beyond the minimum standards set by regulation. It is, therefore, reasonable to conclude that repealing certificate of need laws would encourage greater competition without increasing costs or compromising on quality.

The COVID-19 pandemic has highlighted long-standing problems in the nursing home industry. In response to the crisis, it is incumbent upon us to rely on evidence-based policy decisions and abandon the top-down approach of the past to ensure high-quality care for Florida’s growing elderly population.

A version of this column previously appeared in YourObserver.com. 

The post COVID-19 Pandemic Reveals the Need for Nursing Home and Certificate of Need Law Reforms appeared first on Reason Foundation.

In Florida back in March 2020, Gov. Ron DeSantis issued Executive Order 20-52, which declared a state of emergency in Florida and allowed health care workers licensed in other states to provide care to Floridians affected by the crisis. Those licensing exemptions came with the caveat that their services “be rendered to such persons free of charge and … under the auspices of the American Red Cross or the Florida Department of Health.”

Later that month, an emergency order from the state surgeon general, Scott Rivkees, further expanded licensing exemptions for out-of-state health care workers for a period of 30 days. That order has since been extended until the end of Florida’s state of emergency, which expired on Jan. 2.

These temporary actions could go a long way toward addressing the current crisis, but another long-term threat requires permanent reform. Florida had a huge problem with not having enough medical professionals even before the pandemic. According to the Association of American Medical Colleges, the U.S. is expected to experience a shortage of up to 139,000 physicians by 2033. In Florida, there are already 279 designated primary care health professional shortage areas covering a population of more than 6.66 million Floridians. An additional 1,793 physicians are required to fill the existing need in those areas. Projections from the Department of Health and Human Services estimate that the shortage of primary care physicians in Florida will more than double to 4,671 by 2030. (See graph.)

Residents of Sarasota already feel the bite of these shortages as new residents struggle to find doctors, especially specialists, willing to take new patients.

Fortunately, Florida has been leading the way on reforms to address the looming physician shortage. In 2019, the Florida legislature took substantial steps toward clearing the way for telehealth providers to operate in Florida. Telehealth services allow health care professionals to provide care remotely through telecommunication or other digital communication technologies. Florida’s recent reforms allow health care professionals licensed in other states to provide telehealth services in Florida without obtaining a separate Florida license. However, they are still required to register as a telehealth provider in the state of Florida.

In 2020, Florida passed comprehensive scope of practice reforms to expand the role of nonphysician providers. Scope of practice refers to the range of services a health care professional is allowed to provide under state law. Florida’s recent reforms will allow nurse practitioners to practice autonomously without the supervision of a physician. Nurse practitioners are also now allowed to sign documents that would otherwise require the signature of a physician. Pharmacists in Florida can now test for common illnesses, such as strep throat and the flu. In most other states, pharmacists are allowed to administer vaccines but may not provide tests for those common illnesses.

Although these reforms are meaningful, the scale of the looming shortage requires further action. First, temporary measures allowing out-of-state providers to practice in Florida should be made permanent.

Florida already belongs to the Interstate Nurse Licensure Compact (NLC), which provides a streamlined process for registered nurses licensed in other compact member states to obtain a Florida license. However, Florida is not a member of the Interstate Medical Licensure Compact (IMLC) or the Advanced Practice Registered Nurse (APRN) Compact, which would create similar streamlined processes for physicians and APRNs licensed in other states.

Florida should join the IMLC and APRN Compact, but interstate compacts are not the best available solution. For one, compacts only affect one group of health care professionals at a time. Although there are compacts for physicians, registered nurses (RNs) and APRNs, there are no such compacts for pharmacists or physician assistants. Moreover, compacts rely on widespread adoption to be effective. The Nurse Licensure Compact (NLC) has been adopted by 33 states and the IMLC currently includes 29 states. However, the APRN Compact has not been adopted by any states.

Much better would be to simply recognize all licenses issued by other states provided that health care professionals obtain appropriate liability coverage in Florida. Other states including Arizona, Pennsylvania, New Jersey, and Montana have already passed universal license recognition laws to allow medical professionals — and all other licensed workers — to more easily obtain a license.

Second, Florida should embrace innovative technologies in the health care industry and avoid policies that could prevent such innovation from taking place. For example, a growing body of evidence suggests that artificial intelligence is capable of diagnosing some diseases as well or even more accurately than physicians. Although this technology is a long way off from replacing physicians, it could become an essential aid to physicians in the near future and help them be more productive and help more patients. Florida should be cautious to avoid limiting the potential of new technologies in health care settings.

State responses to the COVID-19 pandemic have highlighted the drawbacks of state-by-state medical licensing regimes. Although temporary suspensions of these licensing rules have helped alleviate staffing shortages during the current crisis, the looming shortage of physicians poses a longer-term threat to Florida’s health care workforce. Florida lawmakers should therefore consider permanent reforms to allow out-of-state health care professionals to more easily practice in Florida and embrace the potential of technological innovations.

A version of this column previously appeared in YourObserver.com. 

The post Florida’s Response to COVID-19 Shows How It Could Address the Looming Physician Shortage appeared first on Reason Foundation.

The tragedy unfolding in America’s nursing homes highlights the need to address long-standing failures in the industry. In a new policy study published by the James Madison Institute, Protecting Florida’s Most Vulnerable: Market Based Reform for Improving Nursing Home Care, I offer recommendations to address these problems.

Between state and federal requirements, nursing home care is among the most highly regulated industries in the United States, but quality issues remain rampant. Considering the vulnerability of nursing home residents and the potential for neglect and abuse, some degree of regulation and oversight is necessary and appropriate. However, policymakers must acknowledge the limitations and tradeoffs associated with regulation.

Importantly, regulations only establish minimum standards of care and do not provide incentives to go beyond those minimum standards. As in any industry, the best mechanism to improve service are incentives and competition. Unfortunately, state-level policies often restrict competition in the nursing home industry.

For example, state-level certificate of need (CON) laws require health care providers to receive government approval in order to construct new facilities, expand existing ones, or offer new medical services. These laws were implemented under the misguided theory that restricting supply would control health care costs by preventing over-investment. However, the bulk of evidence suggests that CON laws do not achieve this goal.

States With and Without Nursing Home Certificate of Need Laws

Source: National Conference of State Legislatures

*While Wisconsin repealed its CON program in 2000, the state maintains a similar approval process for nursing home beds.

Several states, including Florida, have repealed or reformed their certificate of need programs in recent decades. In 2019, Florida passed CS/HB 21, which eliminated CON laws for general hospitals, comprehensive rehabilitation, specialty hospitals, and tertiary health services. Certificate of need requirements were maintained for nursing homes, skilled nursing facilities, hospice programs, and intermediate care facilities for the developmentally disabled.

Despite overwhelming evidence that CON laws do not reduce health care costs, proponents argue that limiting the number of nursing home beds will control Medicaid costs. However, that assertion is not supported by research on the subject. A 2016 study found that while nursing home Medicaid spending per enrollee declined in all states between 1992 and 2009, the rate of decline was actually higher in states without CON laws. As the authors noted, “by 2009, compared to states without CON, Medicaid spending per enrollee on nursing home care was 1.8 times higher in states with nursing home CON.”

Proponents of nursing home CON also argue that CON requirements improve quality by ensuring high occupancy rates. They suggest that eliminating Florida’s CON program would lead to a dramatic increase in the number of nursing home facilities and beds. As a result, facility occupancy rates would decline, revenues would fall, and care providers would be unable to cover the costs required to provide quality care. Again, the available research does not support these claims.

A recent study found that certificate of need requirements and higher occupancy rates are both associated with lower quality of care. The authors used scores from the National Nursing Home Survey, which measures facility cleanliness, staffing adequacy, and satisfaction ratings from a sample of residents in each facility. After controlling for other relevant factors, the authors found that survey scores are about 18 percent to 24 percent lower in states with CON requirements. Moreover, a one-point increase in the occupancy rate was found to result in a 0.5 percent reduction in survey scores on average.

While certificate of need laws do not achieve their goals of reining in costs or improving quality, they do have significant distortionary impacts that benefit incumbent care providers to the detriment of consumers and potential competitors. For example, Florida’s CON program tends to lead to outdated, larger nursing facilities by protecting existing providers from competition and favoring expansions over the construction of new, state-of-the-art facilities.

As a result, over 30 percent of Florida’s nursing homes were built before 1981 and about 16 percent are over 50 years old.

Florida also tends to have larger facilities on average than other states, especially compared to those without CON requirements. Data from the Kaiser Family Foundation indicates that Florida has approximately 120 beds per facility compared to the national average of 106 beds. States with CON laws have an average of 101 beds per facility while states without CON have an average of 89 beds per facility. This is important because research suggests that smaller facilities tend to be associated with a higher quality of care than larger facilities.

In sum, the evidence indicates that certificate of need laws may be counterproductive to the goals of reducing costs and improving quality. They also protect incumbent care providers from competition that would otherwise create incentives to improve quality beyond the minimum standards set by regulation.

It is, therefore, reasonable to conclude that repealing certificate of need laws would encourage greater competition without increasing costs or compromising on quality.

The COVID-19 pandemic has highlighted long-standing problems in the nursing home industry. In response to the crisis, it is incumbent upon us to rely on evidence-based policy decisions and abandon the top-down approach of the past to ensure high-quality care for Florida’s, and the nation’s, growing elderly population.

The post Mistakes During the COVID-19 Pandemic Highlight the Need for Nursing Home Reforms appeared first on Reason Foundation.