Patients suffer when states limit health-care choices

Over the past several decades, American families have experienced skyrocketing health-care costs. While the national debate over the Affordable Care Act has dominated our public discourse, a new report reveals that state government policies are responsible for much of our out-of-control health care costs.

On Dec. 3, the U.S. Department of Health and Human Services (HHS) released a comprehensive study that shows the numerous state rules and regulations that limit health care access, increase medical costs and reduce patient choices. The groundbreaking 119-page report finds that over recent years, states have erected copious barriers to entry that prevent qualified medical professionals from treating patients in need. 

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One of the most conspicuous barriers states impose are Certificate of Need (CON) laws, which require new providers to prove to a government board that the community needs additional medical services. Although this may seem like a reasonable regulation, existing providers routinely use this process to block new facilities from opening and competing against them. In 2016, Christopher Koopman and Thomas Stratman of George Mason University found that states that enforce CON laws have 30 percent fewer hospitals and 14 percent fewer surgery centers than states without these laws. 

Besides onerous CON laws, states also impose scope-of-practice rules that prevent qualified professionals such as nurse practitioners (NP), physician assistants and dental therapists from treating patients in underserved areas. For example, in 28 states, lawmakers prohibit NPs from providing basic primary care services to patients unless a physician is physically present, even though they are fully certified to deliver these treatments independently.

As a result of all of these anti-competitive laws, protected providers routinely charge individuals substantially higher prices than providers that face competitors. A May 2018 study by researchers at Yale University’s Institution for Social and Policy Studies found that hospitals without competitors charge families 12 percent more than those in areas with a wider variety of hospital options. Furthermore, analysis by the Brookings Institution found that families pay 17 percent more for pediatric preventive care in states that limit access to nurse practitioners.

These barriers to high-quality health care also impose long-lasting and even fatal harm on America’s most vulnerable patients. When a single hospital provides medical services in an area, experts find that it often provides lower quality care than hospitals that face ample competition. One Stanford University study found that elderly patients who experience a heart attack have a statistically higher chance of dying if they are forced to receive care at a hospital that lacks robust competition. Based on these figures, HHS estimates 5,925 heart attack victims die prematurely each year because of less health-care competition. 

Fortunately, forward thinking leaders across the political spectrum are steadily rolling back these government barriers to affordable, quality health care. In 2017, lawmakers in Illinois and South Dakota enacted legislation that allows NPs to provide primary care to underserved areas. And this year, Arizona Republican Gov. Doug Ducey signed into law reforms that empower dental therapists to deliver oral care to rural and inner-city communities that lack dentists. 

Now, pro-patient legislators are gearing up to expand health-care choices in 2019. In Alaska, Georgia and Virginia, policymakers are crafting proposals to rollback CON laws, which would collectively add 271 additional health-care facilities to all three states. And in Texas, lawmakers plan to loosen the Lone Star State’s costly NP barriers, which would alleviate their crippling physician shortage.

The Trump administration’s latest report is a stark reminder that patients need a diverse and competitive health-care system to meet their unique medical needs. When communities are served by a wide array of competing medical providers, everyone enjoys better access, lower prices and high quality health care.

Charlie Katebi is a state government relations manager at The Heartland Institute, a nonprofit, nonpartisan public policy think tank. Katebi is also a policy fellow at the Millennial Policy Center.