Tag: healthcare

Can Health Regulation Move Beyond Markets?

Posted on by Lone Candle

“I document a large and mounting body of empirical research that shows that key market-based policies in health care have failed. Even if well intended, these policies have often not helped people make meaningful choices of medical care or insurance plans. And neither have they controlled spending, as experts promised.

In fact, they are doing exactly the opposite. They are setting people up to make poor choices and are scaffolding a massive, ineffective market bureaucracy.

One-third of people said they would rather file their taxes than read the terms of a health plan. And reams of studies summarized in my article affirm that people do not choose well among health insurance plan options, and these errors are hard to remedy with anything short of a strong default plan—in which case, one must ask whether “choice” even matters.

Likewise, even when people have to pay a large share of their own medical care and have easy access to price information, they still do not compare prices or choose the lowest-price options, even for services with little variation in quality. One partial explanation is that health care patients look to doctors—not price lists—to steer their care. Patients lack the desire, time, knowledge, and skills to navigate medical decisions as “consumers.”

The focus of the last several decades of health regulation has been to try to fix broken markets and flawed consumers through constant regulatory, technocratic tinkering—either to spur competition or to nudge consumers toward better choices. This tinkering has fallen short, and it has produced a massive market-based bureaucracy.

Thick layers of government regulations and regulators attempt to scaffold failing market-based policies. Plus, this scaffolding has deeply embedded private health care enterprises—with high profits and salaries—into the bureaucracy. As one example, the 2018 salary for the CEO of Blue Cross and Blue Shield of Michigan was recently reported to be $19 million, which is not an unusual sum among health care executives.

Because markets do not meaningfully enhance choice, do not avoid bureaucracy, and have certainly not solved cost problems, it is time to stop tinkering and to seek a better foundation for the next era of health policy and regulation.”

…

“It is time to give up the false hope that health care markets and individual purchase decisions will produce a health care system that Americans want and, in the process, drive down spending. Policymakers have spent a half-century avoiding the hard questions about what values, objectives, and tradeoffs should guide health policy, by hoping that markets would magically answer these questions.

The reality is that the only way to build effective health policy—and, in turn, health regulation—is by engaging deeply in these hard questions and the challenging political battles they necessarily provoke.”

It Took More Than 15 Years for a South Carolina Hospital To Get Permission To Be Built

Posted on by Lone Candle

“Before being able to break ground on a new hospital there, Piedmont Medical Center had to navigate the state’s Certificate-of-Need (CON) process, which in this case required going all the way to the state Supreme Court to fend off a legal challenge from a competitor. All that to build a 100-bed facility that the South Carolina Department of Health and Environmental Control had determined, all the way back in 2004, was indeed needed in the region.

Unfortunately, “need” is not enough in many cases. Like how zoning laws and mandatory environmental reviews might be well-intentioned policies but are frequently wielded by “not in my backyard” (NIMBY) activists as a way to tangle new development in costly piles of red tape, the CON laws on the books in many states can be used by existing hospitals to delay or prevent new facilities from opening.

That’s exactly what happened in Fort Mill. A hospital chain based in Charlotte challenged Piedmont Medical Center’s plans for a new facility, then sued to block the state’s decision to give Piedmont permission to build the hospital. The litigation cost thousands of dollars and delayed construction by several years. Researchers at the Americans for Prosperity Foundation, a free market think tank, argue that even the threat of such lengthy, expensive reviews ends up deterring investments that would otherwise take place.”

…

“Artificially limiting the supply of health care services can be a major issue when a pandemic or other emergency strikes, of course, but CON laws harm public health even without the help of a novel coronavirus. States with CON laws have higher mortality rates for patients with pneumonia, heart failure, and heart attacks, according to research published in 2016 by the Mercatus Center, a free market think tank that argues for repealing CON laws. Other studies show that CON laws contribute to health care shortages in rural areas because they force medical providers to focus on wealthier, more populated areas in order to make up for the added costs imposed by the CON process.”

Video Sources: Do high deductibles lower healthcare prices? Price Controls VS Managed Market Healthcare.

Posted on by Lone Candle

High-Deductible Health Plans Reduce Health Care Cost And Utilization, Including Use Of Needed Preventive Services Rajender Agarwal et al. 10 2017. HealthAffairs. https://www.healthaffairs.org/doi/10.1377/hlthaff.2017.0610 Does High Cost-Sharing Slow the Long-term Growth Rate of Health Spending? Evidence from the States Molly Frean and Mark

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FTC Drills Alabama Licensing Board for Anti-Competitive Scheme Targeting Teledentistry

Posted on by Lone Candle

“As part of a consent agreement announced Tuesday, the Federal Trade Commission (FTC) said the Board of Dental Examiners of Alabama would stop enforcing rules that limited “consumer choice and excluded new providers” offering braces and other teeth alignment services.

Those rules were crafted in 2017, after startups like SmileDirectClub began operating in Alabama. According to the FTC, the board took steps to stop the expansion of “firms providing clear aligners in Alabama through a teledentistry model” by amending its rules to ban dental hygienists and other medical professionals from performing the scans that are necessary to ensure proper fitting of the alignment devices. Previously, licensed dentists were allowed to supervise the scans from a remote location. Under the new rules, they would have to be on-site when the scans were done.

Over the next two years, the board delivered cease-and-desist letters to providers who offered those services without on-site licensed dentists.

“The actions of the Dental Board have deprived consumers in Alabama of low-price, convenient options for teeth alignment treatment without any legitimate justification or defense,” the FTC argued in a complaint against the board. Those actions, the commission says, “unreasonably restrained competition” and violated federal law.

The case is a sequel to the FTC’s 2015 victory at the U.S. Supreme Court in a case challenging anti-competitive behavior by a similar board in North Carolina. In that instance, the North Carolina Board of Dental Examiners sent cease-and-desist letters to kiosks offering teeth whitening services. The practice of whitening teeth, the board declared, could only be done by licensed dentists.

When that case ended up before the U.S. Supreme Court, the justices ruled that licensing boards controlled by a majority of “active market participants” could not make deliberately anti-competitive rules—unless those boards were “actively supervised” by some other element of state government. As a result of that ruling, licensing boards enforcing anticompetitive rules could be sued for violating federal antitrust laws.

The ruling opened up a new legal avenue for challenging overbearing licensing boards that limit economic opportunities by blocking competition in certain professional fields. It was a resounding defeat for overreaching state regulation and “the culmination of 15 years of effort” Maureen Ohlhausen, then-chair of the FTC, told Reason shortly after the ruling.

That case laid the groundwork for the more recent actions in Alabama, where six of the board’s seven members are required by law to be licensed, actively practicing dentists. And the board’s actions are not “reviewed or approved by any neutral state officials with the power to veto or modify” its decisions, the FTC found.

Under the terms of the consent agreement struck between the FTC and the Alabama dental board, the board does not admit to violating any laws or to engaging in the alleged anti-competitive behavior. But, going forward, the board has agreed to stop requiring on-site supervision by licensed dentists of the alignment scans necessary for teledentistry services.

That should give residents of Alabama—some 1.8 million of whom live in areas deemed to have a shortage of dental professionals and could clearly benefit from a greater supply of teledentistry services—something to smile about.”

It’s time to stop describing lifesaving health care as “elective”

Posted on by Lone Candle

“Data shows that more than 90 percent of US surgeries are considered elective or nonessential. Collectively, they bring the nation’s health care system between $48 billion and $64 billion of revenue per year. This is why so many hospital systems struggled financially in the early days of the pandemic: While beds filled with Covid-19 patients, many profitable services ground to a halt.

Yet the definition of essential care has varied not only by health care provider, insurance company, and hospital system, but also by the state, city, or town that a person happens to live in. Some conditions are clearly emergencies, such as a rupturing appendix. But “nonessential” does not necessarily mean something purely cosmetic like a rhinoplasty or tummy tuck. During the pandemic, Sakran said, he has had to postpone surgeries to repair hernias that impede people from comfortably eating or walking.

The logistical difficulty of defining essential care has been “an ongoing challenge for insurance companies,” said Jesse Ehrenfeld, a physician and LGBTQ health advocate who chairs the American Medical Association board of trustees. It “leads to a lot of individual decision-making happening that is inconsistent.””