Posted on Apr 18, 2020

Delving In Together: Regulatory Relief Will Lead The Recovery

Graham Nash of Crosby, Stills, Nash, and Young fame once wrote, “Rules and regulations, who needs them? Open up the door. We can change the world.” While the hippie crooner likely had other ideas in mind, he wasn’t wrong in his claim that excessive regulatory burdens stifle innovations for our country, our communities, and our lives.

Never before has this struggle been clearer than in the coronavirus crisis. We have seen federal, state, and local governments roll back rules that stalled the delivery of medical services or blocked access to important products. We have also discovered that rules governing particular industries might do more harm than good. And we have learned that many day-to-day regulations meant to direct human behavior are perhaps unnecessary after all.

While the country of course needs some degree of regulation to safeguard our people and our economy, the pandemic pause of regulations offers the promise of sanity and simplification in the future. As policymakers take a closer look at which of these rules are actually useful in serving American interests and which stand in the way of meeting America’s needs, we’ve compiled a greatest hits album of pandemic-related regulatory relief.

The federal government has reversed dozens of rules since the coronavirus pandemic began.

  • Freeing health care workers to cross boundaries – online and IRL (in real life): As the deadly reality of COVID-19 became apparent, the federal government acted swiftly to ease rules on the health care industry, hoping to extend more options for patients and providers. To provide support for coronavirus hotspots in dire need of qualified medical personnel, the Department of Health and Human Services (HHS) waived state licensure requirements for health care providers wishing to serve where they were most needed. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) announced that seniors could now take advantage of a wide range of telehealth services, irrespective of where they lived. HHS also encouraged the use of telehealth options, permitting health care providers to use video platforms like FaceTime and Zoom to safely serve their patients.
  • Getting supplies and technology to those who need it: In mid-March, the Food and Drug Administration (FDA) began allowing private companies to advertise COVID-19 tests directly to the general public in efforts to address test kit scarcity. The Federal Emergency Management Agency (FEMA) also granted permission for Puerto Rico, the District of Columbia, and other U.S. territories to purchase personal protective equipment from foreign suppliers, a reversal of a nearly century-old regulation enacted by the Hoover Administration.
  • Flexibility in flight and on the open road: In the midst of an unprecedented public health crisis, the reliable transportation of vital goods has become especially important. As a result, the Department of Transportation has lifted hours of service regulations that will create greater flexibility for truck drivers delivering medical supplies, equipment, or food. Meanwhile, the Transportation Security Administration (TSA) has eased liquid limitations to allow passengers to travel with up to 12 ounces of liquid hand sanitizers in their carry-on bags until further notice.
  • Educational flexibility works: Widespread closures of college campuses have caused the Department of Education to rethink its rules governing higher education. They announced in mid-March that they had granted “broad approval” to schools wishing to be exempt from federal standards on calendars and course schedules as they enacted “distance learning” programs to open virtual classroom alternatives. Acknowledging the unique financial pressures on students, the Department of Education also permitted colleges and universities to extend current financial aid eligibility for students who qualify for federal work-study and Pell grants, even if they aren’t on campus.

States and cities led by both Republicans and Democrats also embraced regulatory relief.

  • It turns out adults are responsible enough to buy alcohol and takeout: With hundreds of millions of Americans stuck at home, the restaurant industry stood ready to provide meals – if only they could. In many places, regulations on delivery, takeout, and the sale of alcohol made it difficult. So, governors and mayors stepped in. In New York, Governor Andrew Cuomo announced that bars, restaurants, distilleries, and wineries could offer alcohol for takeout orders. In New York City, City Hall waived a rule that prevented delivery workers from using e-bikes to transport orders. And in Boston, city officials waived existing regulations to allow all restaurants to offer takeout, even if they did not have a license to provide the service.
  • Trucks that deliver booze are also capable of delivering food: In Texas, Governor Greg Abbott reversed a longstanding rule that prevented alcohol delivery trucks from delivering supplies to grocery stores. In doing so, he provided another way for grocery stores to keep their shelves stocked. In another move to ease transportation regulations, Governor Abbott waived certain commercial trucking regulations to “expedite commercial vehicle delivery of more supplies.”
  • Expanding patient access to health care providers: Echoing efforts from the federal government to loosen the regulatory stranglehold on the health care industry, state governments also offered relief to the medical field. In New York, Governor Cuomo expanded “scope-of-practice” rules to permit physician assistants, nurse anesthetists, and nurse practitioners to perform jobs they’ve trained to do without additional supervision. In Washington, the government is allowing out-of-state health practitioners to practice without a license from their state. To deal with increased pressure on pharmacies, Pennsylvania now permits out-of-state pharmacies to ship goods into the state, while they also allowed pharmacy supervision to be conducted by phone or computer. While patients cannot see their providers, the Alabama Board of Pharmacy is temporarily allowing pharmacies to process emergency refills on essential medications. And in North Carolina, their Department of Health and Human Services temporarily lifted a rule requiring hospitals to receive permission from the state government to add more beds, the first reversal of the state’s “Certificate of Need” laws in decades.

With political will, some of the sound policy solutions detailed above could become more than short-term remedies, cutting red tape that has long delayed or prevented the delivery of patient-centered care. However, more common-sense regulatory rollbacks are needed for the recovery, most immediately to fortify our health care industry. For example:

  • Reform regulations to expand access to care: A number of scholars have pointed to further regulatory strangleholds that limit access to care by restricting medical professionals’ ability to practice. Competitive Enterprise Institute experts suggest states expand their “scope of practice” laws, which would allow qualified health care workers to perform functions that will be curtailed due to an anticipated physician shortage. Cato Institute is even more ambitious, arguing that licensure laws should be reformed to the point that they’re eliminated all-together. On the technology front, Cato Institute calls for the FDA to expedite its emergency use authorization of a new ventilator, as bureaucratic delays have stymied innovation and can cost lives.
  • New lifesaving drugs need a streamlined regulatory process: Hoover Institute scholars Charles L. Cooper and David R. Henderson argued in The Wall Street Journal the FDA should revoke its efficacy requirement for new drugs to speed up the delivery of vital therapeutics. They point to a regulation enacted in 1962 that forces companies to prove both the safety and efficacy of new drugs. Before, companies had only been required to provide assurance that new drugs were safe for patients. Now, this two-hurdle system delays the availability of medicine as researchers await clinical trials that confirm new medicine is not only safe but also conclusively effective at treating an illness. Experts say that if individual patients and their providers feel that proposed regimens are safe for use, they should be allowed to try them.
  • Loosen rules on diagnostic tests so professionals can perform more of them: If coronavirus has taught us anything, it’s the value of widespread testing to control the outbreak of a virus. With testing, health care professionals can treat and isolate infected people, protecting the general public as the sick patient recovers. That’s why the Competitive Enterprise Institute says FDA regulators should stop requiring premarket approval for laboratory-developed diagnostic tests. “The FDA has used its enforcement discretion to waive the premarket review requirement for tests developed and used exclusively within a single laboratory, known as ‘laboratory developed tests’ (LDTs). However, when the Secretary of Health and Human Services declares an official public health emergency, the agency does require premarket approval for LDTs, though it will grant an expedited Emergency Use Authorization for LDTs that meet the necessary criteria…The FDA should permanently waive the premarket approval requirement for LDTs, and Congress should write the exemption into the statute.”

All of this regulatory relief did not happen in a vacuum. These positive steps were made possible in part by industry representatives passionately making the case to decisionmakers that, if unhindered by superfluous rules, the companies they represent could better contribute to our country’s public health and economic security. Policymakers agreed.

By removing regulatory barriers, government officials are implicitly acknowledging that a number of regulations on the books are not necessary to safeguard the American public. Instead, cumbersome rules can inhibit progress, especially at times when it is needed most. In the weeks ahead, policymakers will make further regulatory adjustments to meet the immediate needs of those they serve. And after this crisis is over, they should thoughtfully examine which rules can be permanently revised or repealed so that our country and our states are never in this position again.

While policy experts have largely focused on reducing unnecessary regulations in health care, expect rules governing a variety of industries to be reviewed in the months ahead to aid in the economic recovery. As policymakers develop new regulations and update current rules, informed and trustworthy public affairs professionals have an opportunity to make the case for responsible reforms to help revitalize their companies, coalitions, and industries. Those who have consistently invested in such efforts are best poised to shape these reforms and thwart unnecessary regulatory overreaches to this pandemic.

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