How To Make Health Care More Affordable

Virginia's new Democratic politicians have a chance, but it goes against their partisan instincts.

Virginia's new Democratic governor, and its new class of Democratic lawmakers, have an opportunity to improve access to health care in Virginia. But to do so, they might have to go against their partisan instincts.

Gov. Ralph Northam already has made Medicaid expansion one of his top priorities. Republicans don't like the idea. But their recent abandonment of divisive social causes such as abortion and anti-LGBT issues suggests they might be more receptive to compromise on Medicaid as well.

Then again, maybe not. Regardless, Democrats and Republicans should be able to find common ground on two other approaches to expanding health care.

The first is a bill from Republican Del. Roxann Robinson. HB 793 would let nurse practitioners practice medicine independently, rather than under the thumb of a supervising physician, after a probationary period of supervision.

At present, nurse practitioners in Virginia must have a contract to work under a doctor's watchful eye. If a nurse can't find a doctor to agree to such an agreement, the nurse is out of luck. If a doctor retires or dies, the nurse is out of luck. If a doctor joins a group practice with restrictive rules, the nurse is out of luck again.

Roughly half the states in the U.S. already permit advanced-practice nurses to operate independently. A huge body of research has validated the approach. The Institute of Medicine recommends it because the rules limiting nurse practitioners "are related not to their ability, education or training, or safety concerns, but to the political decisions of the state in which they work," and because "most studies showed that NP-provided care is comparable to physician-provided care on several process and outcome measures. Moreover, the studies suggest that NPs may provide improved access to care."

The Department of Veterans Affairs adopted the reform last year. The Kaiser Family Foundation endorses it. The Federal Trade Commission also supports expanding the ability of nurse practitioners to perform medicine independently, which would provide "safe, lower-cost competition" to physicians. Likewise, it would increase the supply of medicine in underserved areas, such as rural areas, where there is a serious shortage of doctors, as well as statewide. (By one estimate, Virginia will need 29 percent more doctors by 2030 to maintain the status quo.)

Other research has shown that giving nurses a greater scope of practice helps bring costs down by as much as 35 percent, with higher levels of patient satisfaction.

That's the first reform. The second? Repeal the state's Certificate of Public Need (COPN) requirements.

Virginia's COPN regime requires health care providers to get the state's permission to spend their own money on investments such as new hospital wings or major medical devices such as MRIs and CT scanners. The process is hugely expensive and time-consuming — in large part because market incumbents, such as large hospital chains, are allowed to weigh in on whether the state should permit new entrants to compete with them.

Congress originally imposed the system to deal with a problem caused by federal reimbursement rates for Medicare and Medicaid. Washington eventually changed the reimbursement formulas and lifted the COPN requirement, but many states (including Virginia) kept it in place.

In theory, COPN is supposed to control health care spending through central planning. In practice, it doesn't. Washington state found, for instance, that "CON has not controlled overall health care spending or hospital costs." A commissioner for the Federal Trade Commission has written: "Ironically, a government program originally aimed at reducing health care prices is likely inflating them, at least in some situations."

The FTC and the Antitrust Division of the Justice Department have repeatedly argued that certificate-of-need laws "undercut consumer choice, stifle innovation, and weaken markets' ability to contain health care costs. Together, we support the repeal of such laws, as well as steps that reduce their scope." As they told a Virginia working group in 2015, "the evidence to date does not suggest that CON laws have generally succeeded in controlling costs or improving quality."

In fact, large health care providers now argue exactly the opposite: By stifling competition, COPN laws help hospitals generate excess profits that they can then use to pay for indigent care. Virginia sometimes even requires charity care as part of the price for granting COPN approvals. In other words, a program originally imposed to lower costs is now justified on the grounds that it raises them.

Giving nurses greater freedom to practice and repealing COPN would both lower costs and expand access to care. To achieve either, however, lawmakers will have to overcome opposition from powerful physician and hospital lobbies. Gov. Ralph Northam's views on the issues are opaque, but as a pediatric neurologist he might have concerns that need to be overcome as well. And Democrats, who are philosophically inclined toward more regulation rather than less, might have to overcome their own instincts in that regard. But if they can, patients across Virginia would benefit.

This column originally appeared in the Richmond Times-Dispatch.