As lawmakers at all levels of government work to combat the health and economic impacts of COVID-19, the pandemic is throwing the costs of overregulation into sharp relief. In response, state and federal authorities are temporarily rolling back a wide range of regulations. Removing red tape that complicates and hinders the response to coronavirus is a wise move, but regulatory costs are not limited to the present context. Once the coronavirus pandemic passes, lawmakers should consider whether these government regulations were ever necessary to begin with and should do away with them permanently.
The rapid spread of COVID-19 is overwhelming health care systems across the world. In the United States, anti-competitive regulations are exacerbating the problem by slowing testing, limiting the expansion of hospital capacities, inhibiting the use of telemedicine, and preventing medical professionals from practicing to the full extent of their training.
Certificate of need (CON), for example, laws require health care facilities to receive permission before expanding their capacities or providing new services. The lengthy and burdensome approval process is preventing hospitals from quickly adding additional beds to care for COVID-19 patients.
Several states have repealed their certificate of need laws in recent years, but 35 states still require permission to expand health care facilities. In response to COVID-19, states including New York, North Carolina, Virginia, Connecticut, and Michigan are moving to temporarily suspend their CON laws. Ample research suggests that CON laws increase costs and reduce access to care by limiting competition and supply—even outside of health care emergencies like COVID-19. States should seriously consider permanently repealing these laws to ensure adequate access to affordable care after the crisis has passed.
Telemedicine could help reduce the spread of coronavirus by allowing patients to interact with health care professionals remotely. Unfortunately, unnecessary regulations prevent telemedicine from reaching its full potential. For example, while telemedicine makes it possible to connect patients to professionals across vast distances, state-level licensing laws often prevent patients from seeking care across state lines. However, several states have taken temporary measures to allow out-of-state physicians to practice telemedicine without seeking an additional license. Enacting these reforms permanently would improve access to care and help mitigate the looming shortage of physicians.
Similarly, scope of practice laws set by states determine the range of services medical professionals are permitted to provide. In many states, these laws prevent advanced practice registered nurses (APRNs), physician assistants, and pharmacists from practicing to the full extent of their training. For example, scope of practice laws may prevent APRNs from prescribing medication or require that they work under the supervision of physicians. In response to COVID-19, states including New York and Arizona are loosening these requirements. These measures should improve access to care and allow physicians to focus on the patients in greatest need. Permanently expanding the scope of non-physician health care workers, as many states have done in recent years, would continue to improve health care access after the virus subsides.
Business and Labor
The COVID-19 pandemic is resulting in unprecedented economic shutdowns across the globe. In the US, there were a record-shattering 3,283,000 new jobless claims during the week ending on March 21. In an effort to support workers and small businesses, states are rolling back regulations that limit their flexibility during the crisis.
Restaurants and bars are among the hardest hit by government-issued stay-at-home orders and mandatory business closures. Most states have issued orders forbidding restaurants from providing dine-in service but are still allowing delivery and take-out orders. However, state and local regulations restrict the to-go sale of alcoholic beverages. Several states and cities, including the state of New York, Texas, and Los Angeles are now suspending enforcement of these regulations. While these temporary waivers will help support restaurants, they won’t do much to help bars and breweries because most require food to be part of the order. Going forward, state and local lawmakers should consider permanently eliminating these regulations. If alcoholic beverages are served in sealed containers, there is no clear justification for prohibiting take-out or delivery.
States have also encouraged people to work from home if they are able, but regulatory hurdles can make it difficult to operate a business from home. As R Street’s Shoshana Weissmann and Jarrett Dieterle detailed in The Wall Street Journal, in recent years local governments have cracked down on a man operating a recording studio from his garage, refused to permit an at-home yoga instructor, and even shut down a video game blogger for uploading YouTube videos from his house. It shouldn’t take a pandemic to realize regulation and permitting requirements for home businesses like these impedes entrepreneurial activity. Eliminating these unnecessary barriers would lend greater flexibility to workers and small businesses and could aid economic recovery after the crisis.
A host of other state and federal regulations are being suspended to limit the spread of COVID-19 and ensure an adequate supply of essential goods.
At the federal level, the Transportation Security Administration (TSA) is currently allowing airline passengers to carry one container of hand sanitizer up to 12 ounces, which is more than three times the usual limit of just 3.4 ounces.
For example, Texas is allowing alcohol delivery trucks to also carry groceries to help keep shelves stocked. “Suspending these state trucking regulations will improve our ability to deliver the necessary supplies throughout the state so that grocers and retailers are able to continually stock their shelves,” said Gov. Greg Abbott. “This is yet another example of the private sector stepping up and Texans helping Texans as we all work to mitigate the impact of COVID-19 in our state.”
It’s not just the private sector stepping up, it is also another example of an unnecessary law that should be eliminated permanently, not simply suspended. There’s no reason for Texas to go back to banning trucks that deliver alcohol from also delivering grocery supplies.
Amid concerns that reusable shopping bags could contribute to the spread of COVID-19, governments are rolling back bans on single-use plastic bags. While the impact of these measures is still an open question, plastic bag bans are bad policy outside of the pandemic. Plastic bags are actually often reused and make up a relatively small percentage of plastic litter. Ultimately, consumers should choose whether or not they use plastic bags.
North Dakota Gov. Doug Burgum wisely issued an executive order instructing all state agencies, elected officials, and offices within the executive branch to identify any rules or regulations that could complicate the state’s response. Other states should follow North Dakota’s lead and seek to identify any regulations that are causing undue harm during the crisis.
Suspending these burdensome regulations during the COVID-19 pandemic is a good idea, but many of these regulations impose costs beyond just complicating the response to the coronavirus crisis. Lawmakers should consider those costs and question whether these regulations are necessary at all.