The Joint Economic Committee held a hearing on May 13 entitled, “The Burden of Health Services Regulation.” Chair Robert Bennett (R-UT) noted that health care is “the most intensively regulated sector of our economy,” but said that there was a “disconnect in which people do not appreciate how the burdens of regulations are ultimately borne.” He added that many consumers wrongly believe that insurers and employers pay the extra costs associated with health care regulations, “when in reality those costs come out of their own pockets in one form or another.”
Ranking Member Pete Stark (D-CA) criticized the premise of the hearing, saying, “It implicitly assumes that regulations are simply useless impediments to economic efficiency and lowering health care costs.” Giving an example of a regulation that was enacted to curb abuses in health care services, Rep. Stark said, “Hospitals routinely turned away poor women in labor until Congress intervened and enacted the Emergency Medical Treatment and Active Labor Act (EMTALA), which prohibited this practice and guaranteed access to emergency care to all people, regardless of their ability to pay.”
Dr. Christopher Conover of Duke University presented the committee with preliminary results from research he is conducting under contract with the Agency for Healthcare Research and Quality to examine the costs associated with health care regulations. Using a “‘top down’ approach that relied on extrapolations from other industries,” Dr. Conover said that he estimates that in 2002, “health regulations could have imposed an annual cost of at least $28 billion to as much as $657 billion.” Using a “‘bottoms up’ approach that systematically examined the evidence,” he estimates that the “expected costs of regulation in health care amounted to $340 billion in 2002.”
Pointing to the increasing costs of health care insurance, Dr. David Hyman of the University of Maryland School of Law said that insurers “must weigh whether better coverage is worth offering if it prices the policy out of the market.” Additionally, he said that there may be “tradeoffs” within an insurance pool for providing certain types of coverage. “For example, coverage of routine mammograms for women in their 40s may preclude coverage of bone marrow transplants for advanced breast cancer patients. Coverage of family planning services may preclude coverage of more aggressive screening for sexually transmitted diseases. Coverage of aggressive screening for prostate cancer may result in more limited coverage for screening for uterine cancer. Mandates can reallocate resources within the common pool, but new or enhanced services are covered at the expense of something else.”
Dr. Hyman cited legislation that mandates a 48-hour hospital stay for women having normal vaginal births and a 96-hour hospital stay for women having cesarean sections as an example of a costly regulation. “The case for extended postpartum stays was based almost entirely on wrenching, but extraordinarily unrepresentative anecdotal horror stories and overheated rhetoric,” he said, adding, “There is little or no evidence indicating postpartum stays of the specified length provide any benefit, regardless of how one defines benefit.” He continued, “Even if such stays provide a benefit, it does not follow that the benefit justifies the associated cost, or that the same results can not be achieved in some other way at [a] lesser cost.”
Dr. Hyman also criticized the law for failing to address “drive-through deliveries” as “part of the continuum of maternity care,” stating: “The legislation did nothing about the availability of post-discharge services, the quality of services rendered before, during, and after the postpartum hospitalization, the distortions created by hospitals’ use of per-diem pricing, and the manner in which managed care organizations make coverage decisions.” He also pointed to studies showing that one-day stays are becoming more commonplace. “One-day stays accounted for only 7.6% of vaginal deliveries in 1980, but by 1990, had almost tripled to 21.2%. In the intervening five years, one-day stays more than doubled again, to almost 47% of vaginal deliveries.”
Dan Mulholland of HortySpringer, a health care law firm, cited EMTALA as another example of “well-meaning but counter-productive regulatory schemes.” Saying that the statute was passed in “response to concerns that patients were being denied emergency medical treatment because they could not afford to pay,” Mr. Mulholland said, “This seems fairly straightforward and, on its face, unobjectionable. However, like so many other laws, the devil is in the details.”
Describing a provision of the law that requires hospitals to maintain a roster of physicians who are on call to provide specialized treatment, Mr. Holland told the committee, “If a patient needs the services of a specialist, that physician must respond to the call from the emergency room or face sanctions along with the hospital for violations of EMTALA…The EMTALA on-call requirement coupled with the potential for greater exposure to malpractice liability resulting from treating patients in an emergency room setting, has led many doctors to demand payment for providing call coverage. This has created a serious strain on fragile hospital finances and driven up the costs of care.”
