R Street Institute

Real Solutions

Small Regulatory Reforms That Can Help People During the COVID Pandemic

by Shoshana Weissmann, Chelsea Boyd, Courtney Joslin, Nick Zaiac, R.J. Lehmann
March 18, 2020
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issues: Alcohol Policy, Competition Policy, Economic Mobility, Insurance, Occupational Licensing, Telehealth, Transportation
While the federal and state governments figure out the appropriate way to stop the spread of the new coronavirus, there are plenty of narrow regulatory reforms they can implement to help people deal with the fallout. This is not to say that regulatory reform is the only solution, but it can be helpful as people struggle to access medical care and food.

Short-Term Solutions

Enable More Testing

Testing availability in the United States has been problematic from the start. A number of poor decisions and incidents, including the CDC’s inflexibility and contaminated shipment, set early testing behind, some of which could have been minimized by waiving laboratory requirements. As The Atlantic reports, “Dozens of labs in the U.S. were eager to make tests and willing to test patients, but they were hamstrung by regulations for most of February, even as the virus crept silently across the nation.”

Albeit later than many desired, as of March 17 the Food and Drug Administration (FDA) has issued emergency use authorization for six test kits used for detecting COVID-19. For some of the tests, the FDA issued authorization within 24 hours of receiving the application. However, as The Wall Street Journal reported, “Until [the end of February], only the CDC was authorized to conduct tests, some of which turned out to be inaccurate. The CDC says it has since remedied those issues.”

It’s easy to say we need to improve testing capacity, but there are certain limitations to testing samples on such a large scale. For one, the technology required to run the available test kits has limits. At this time, all diagnostic tests rely on advanced molecular diagnostic procedures, which are time consuming, complex and require specific equipment. Depending on the test, processing time ranges from four to eight hours, and the machines that complete the diagnostic reactions have limited capacities.

As the FDA clears more testing products that are compatible with the wide range of machines used in laboratories, the nation’s testing capacity will naturally increase. At the time of this writing, it seems that our network of laboratories and capacity to analyze a large volume of tests is now in place, as long as our medical providers and public health workers have enough supplies and human resources to continue testing via drive-up testing centers and existing medical facilities.

Each day of an outbreak brings a new set of challenges. In hindsight, while some of the testing delays could have been minimized by decreasing regulatory requirements, there were also very real ethical and legal concerns related to relaxing certain rules. Although positive COVID-19 test results must be reported to public health authorities, that doesn’t mean regulations protecting patient privacy and human subjects are automatically set aside. Before relaxing regulations, at any level of government, we must be sure to protect the following:

Enable Medical Professionals to Work Across State Lines and Ease Telehealth Restrictions

In most cases, occupational licenses do not easily transfer across state lines. In addition to many other issues, this makes providing healthcare across the country more difficult. While many states are part of an interstate compact for nurses, no such compacts exist for physician assistants or pharmacists, as Vittorio Nastasi noted in Reason.

Last year, Arizona became the first state to make it easy for residents of other states to move to Arizona and become licensed. Hundreds of new Arizonans are taking advantage of the law already. Governor Ducey’s first-of-its-kind law is a beneficial model for states in general, but particularly now, because states seeking to expedite the transfer of licenses have a good model to start from.

States should also allow doctors currently making use of telehealth systems to prioritize the most important cases through the use of “store-and-forward” or asynchronous telehealth. In this new kind of medical practice, patients upload case information for a doctor to review later, instead of requiring real-time video or phone calls. This allows doctors to review and prioritize cases based on urgency and severity. It also reduces the constraint of schedule coordination between patient and doctor.

Even without similar laws on the books, many states have, in the past week, encouraged medical professionals to help people by easing regulatory burdens:

Expand Medical Professionals’ Scope of Practice

Advanced Practice Registered Nurses and Physician Assistants:

As Vittorio Nastasi explains in Reason, while the United States stares down a physician shortage, “the supply of non-physician providers including advanced practice registered nurses (APRNs), physician assistants (PAs), and pharmaceutical workers is growing rapidly.” Unfortunately, many state scope-of-practice laws prevent these professionals from utilizing the full extent of their qualifications by “limiting the range of services they are allowed to provide or requiring them to work under the supervision of physicians.” The Department of Veterans Affairs reformed these regulations several years ago for those operating within its own system. Indeed, states that expand scope of practice lower medical costs and expand access to care. Evidence is mounting that this model works, and states should follow suit.

For example, in a moment of good timing, legislation to expand nurses’ scope of practice that has been in the works for months in Florida was signed on Thursday by Governor Ron DeSantis. Florida Politics reported that “qualified nurse practitioners will be able to independently operate primary care practices without an attending doctor’s supervision.” “Advanced nurse practitioners with at least 3,000 hours of experience under the supervision of a physician could qualify to provide services including family medicine, general pediatrics and general internal medicine under the new law.”

Pharmacists:

The role of pharmacists in primary care is expanding. In the time of coronavirus, the primary consideration here is that pharmacists reduce physician burnout. This will become increasingly important as new cases overwhelm our medical system. With an expanded scope of practice, pharmacists can help reduce physician workload and increase patient access to medical providers by providing quality patient care. During this pandemic, we must ensure doctor workloads are freed up as much as possible for severe cases. This can be done by expanding pharmacists’ scope of practice in a few ways:

In one example, Alabama has expanded the ability of pharmacists to unilaterally refill medications.

Waive Regulations Preventing Alcohol Trucks From Delivering to Grocery Stores

On Sunday, Texas Governor Greg Abbott announced that Texas will waive “state laws that prohibit trucks from the alcohol industry from delivering supplies to grocery stores. This will provide grocers with another private-sector option to keep their shelves stocked.”

Ease Restrictions on Feeding the Hungry

Last year, a local health department in Georgia made it difficult for MUST Ministries to continue feeding sandwiches to hungry children. This move was by no means the first of its kind, as many localities have hampered the ability of people to feed the hungry and the homeless.

Thankfully, despite the government cracking down on their work, MUST Ministries is once again filling an important role by making sure children don’t go hungry while school is cancelled. 11Alive News reports that, “The Cobb County School District is partnering with MUST Ministries to provide food to students in need.”

Pause, Then End Any Regulations That Prevent People From Working From Home

Coronavirus is forcing many to work from home. Unfortunately, some localities ban this process unless one acquires a special license and jumps through unbelievable regulatory hurdles, even if their work has zero impact on their neighborhood.

As my colleague Jarrett Dieterle and I wrote in the Wall Street Journal:

Officials in Cobb County, Ga., temporarily shut down a videogame blogger whose primary business activity was uploading YouTube videos from his house. A record producer in Nashville, Tenn., who ran a recording studio out of his garage received a cease-and-desist letter from the city, though none of his neighbors had complained. Phoenix refused to grant a permit to a yoga instructor who hoped to teach small classes at her house. It’s hard to gauge exactly how many cities require permits for working from home, but cities in all corners of the country have such rules.

Any cities or states with similar laws on the books ought to pause enforcement now, and ideally repeal all of these provisions going forward. They’re ordinarily counterproductive, but even more so now that public health depends on people working from home. Below is one example:

Insurance Journal reports that some insurance employees who were formerly restricted from working remotely now may do so:

Florida Chief Financial Officer Jimmy Patronis, who oversees the Florida Department of Financial Services, has issued a directive allowing Florida agency customer service representatives who would otherwise be restricted from conducting business outside of a licensed agency to do so given the current circumstances.”

Extend Driver’s Licenses So People Don’t Have to Go to the DMV

In the spirit of social distancing, those who need license renewals from the DMV ought not to have to go there. Luckily, states are advancing the following measures:

Suspend Parking Hours Limits, Overnight Parking Rules and Street Sweeping Restrictions

Don’t make people go outside and move their cars just to avoid racking up tickets. With commuting patterns upended, government parking restrictions criminalize the avoidance of unnecessary trips outside. The following steps are already being taken in California:

Long-Term Solutions

Not everything can be done overnight, and much of what needs to be done will need to happen ahead of the next public health crisis. Below are a few examples:

Certificate-of-Need Law Reform

 At Reason, Eric Boehm explains that one of the reasons America lacks enough hospital beds to handle Coronavirus is certificate-of-need, or (aptly named) CON laws. They are essentially a “competitor’s veto.” Indeed, where CON laws are in place, you must apply for a certificate in order to start a new business. Then established companies in the same field can object to your starting a new company. Then you must prove at a hearing that there is a “public need” for your new business. Timothy Sandefur explains the anti-competitive laws here.

Unfortunately, these laws often apply in the health sector. This means that new facilities may not get built because their competition doesn’t want them to exist. Now more than ever, we ought to understand how this can be devastating. “The U.S. Federal Trade Commission and the Department of Justice, and several academic studies found that by eliminating competition, CON laws actually drove up costs, lowered quality, and limited the availability of needed services,” writes Christina Sandefur. “As the American Medical Association succinctly put it: ‘CON laws represent a failed public policy.’”

The following measures have recently been advanced to address this issue:

Make Licenses Transfer Easily and Quickly Across State Lines 

As previously mentioned, one benefit of the Arizona licensing reciprocity model is that there is an existing system in place to enable occupational licenses to transfer. This model can be improved upon. Furthermore, having a plan in place to expedite this process in public health and other crises would be helpful.

Stop Suspending Occupational Licenses When Professionals Fall Behind on Student Loans

Many states are quickly repealing laws that allow them to revoke occupational licenses when professionals fall behind on student loan payments. Removing the ability of licensed professionals to work in the field they know best, in which they presumably earn the most money, not only works against the goal of loan repayment but is downright cruel. Falling behind on loans has nothing to do with one’s job performance. Worse yet, these revocations are routinely used against nurses.

Transfer More Federal, State and Local Agency Risk to the Global Insurance, Reinsurance and Capital Markets

The impact of the virus on exposed sectors of the economy—particularly travel, retail and hospitality—underscores the need for robust insurance products to cover the risk of business interruption, event cancellation and trade credit. But government agencies and other public bodies face similar risks and could take much greater advantage of private capital to transfer those risks. Insurance can serve to smooth revenues and fiscal shocks and grant public agencies immediate access to claims benefits without needing to go through dysfunctional legislative appropriations processes. The emergence of catastrophe bonds and parametric contracts can significantly accelerate the claims payment process. Whether it is public health agencies who find themselves in need of more manpower and materials, school districts that need to coordinate distance learning, or publicly owned stadiums and convention centers that need to cancel or reschedule events, there are myriad risks faced by governmental bodies that the private market would be willing to take on.

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