By Evelyn Pyburn
Did you know that one of the reasons for the shortage of the COVID-19 test kits was that, not only did the CDC, a large purchaser in the market, restrict their purchases to one company, but they eventually imposed a law on the private sector that basically made it illegal for any other companies to manufacture test kits?
Why a government agency would create such a monopoly advantage for one company can be left to the imagination, but it is an example of the kinds of rules and regulations that have weighed down the health care industry for decades and decades.
There has to be more than a little irony that when the government rushed in to take care of business in regard to the COVID-19 virus they found as primary stumbling blocks the same regulations they had forced upon the industry, and about which many people have long and vociferously complained for decades, as hobbling efficient production, and as being the primary reason for the extremely high cost of health care in the US.
If this alone — the removing of these regulations and focusing a light upon regulatory practices for their crippling impact on the industry and patients – if that should be the only benefit of this upheaval of American life and business, then it will have been well worthwhile.
One has to temper optimism with the realization that there are high-profile politicians (NY Governor Andrew Cuomo, for example) who, right now, are actually advocating that we should double down on top-down control by nationalizing private businesses ….as though there is any evidence that they have ever been able to outperform the private sector. Coercion and political clubs have never created a single marketable product or innovation.
One has to be puzzled about why any rational person would advocate practices that have been so thoroughly discredited as being a benefit to consumers.
All kinds of nonsensical regulations have been falling over the past few weeks as health care workers and other market providers had to be freed from government shackles in order to do their jobs.
For example, they had to remove regulations so that doctors, nurses, and other health care professionals could practice medicine across state lines. Government commonly restrains all kinds of industry segments with this kind of restraint. It is absurd regulation and cannot be justified as being for the prevailing good for consumers. It may empower government but it does not deliver inexpensive, convenient and quality medical care.
Or how about a regulation that dictated how doctors may contact their patients? One of the recently rescinded regulations is that The Department of Health and Human Services suspended a federal regulation that forbids doctors from using their personal phones to communicate with Medicare patients! In this day and age??
Said Pat Barkey, Montana’s premier economist at the Bureau of Business and Economic Research, “If doing this at a time of crisis is warranted what would be the harm of doing it all the time? Our economy is choked with senseless regulations that are mindlessly implemented and do us immense harm.”
When government steps in to tell the private sector how to do things, there is no end to the level of minutia they can reach. The regulations are routinely imposed to solve some problem with never a glance at the broader negative impacts.
So silly and trivial can be their tinkering, and so greatly do they exceed common sense, that one of the difficulties in persuading the uninformed that this is a problem, is that when you tell them some of the specifics, they believe you must be making it up or exaggerating.
Absurd regulation is of course not just a federal issue but it reaches down to local levels. In Montana, for example, some health care providers in order to get licensed must go to state bureaucrats and “show need” for their services. The fact that someone is willing to step into the market, invest money and go through all the regulatory hoops isn’t enough to convince government that entrepreneurs can see a need / opportunity. The whims of un-invested, detached and usually market naïve bureaucrats have final sway over the services, products and prices that are made available to Montana consumers. And, most outrageously, often times it is other bureaucrats, protecting their government funded agencies, who stand up (also at taxpayer expense) to object to the “competition.” They seem not to know that they are not the same as a business. They seem not to understand (or maybe they do) that if the private sector can outperform a government agency providing the same service, the logical process should be for government to bow out and save the taxpayers the expense of something that can be provided better in the private sector.
To “show need” was at one time common as a regulatory demand in all states, but most states have abandoned it. Not so Montana, even though it has been brought forward repeatedly to the state legislature. It is such an absurd approach to advancing health care with its rapidly changing technology, new products and ideas for increasing and improving services, one has to be baffled at the motivation of anyone opposed to eliminating a costly and purposeless barrier.
We have to hope that this is a life lesson for the bureaucrats and politicians who are now struggling to combat the coronavirus. Let’s hope that they are realizing what free market advocates have been saying since the founding of the country: government regulation hampers the ability of free people and civil society to innovate and solve problems, and to meet consumer demands at the lowest cost, most efficient and prudent means possible.
Let’s hope that this misfortune brings about more affordable health care!