Regulopathy

AAPS News; Aug 29, 2013

In the Age of Regulopathy, hospital routine must include exercises like daily Foley Rounds, writes assistant professor of surgery Peter K. Kim, M.D., of Albert Einstein School of Medicine. Whenever you are found, “a cracker-jack team of simulator-trained and credentialed experts comes to fruition at deactivate the Foley catheter ahead of the clock strikes 48 hours post-op. SCIP (Surgical Care Improvement Project) triumphs again, and a potential UTI has become averted” (General Surgery News, June 2013).

But you will find consequences. The urinary tract infection rate occurred, but so did the Foley catheter day (FCD) denominator, so the UTIR/FCD rose together to be reported, Kim writes. Also, central line infections went down because central lines were removed, but patients became malnourished and wounds dehisced.

The Burden of Regulation

As of Apr 30, 20,000 pages of regulations implementing the Affordable Care Act (ACA) had been issued by Health and Human Services, Treasury, the Department of Labor, along with the IRS. As many as hundreds of thousand pages more are hoped for.

Team Obama is the red tape record holder. In 2012 it posted 78,961 pages inside Federal Register, and also the all-time record amount of 81,405 this year. These are largely the progeny of Dodd-Frank, ACA, along with the EPA’s anti-carbon-fuels agenda that even a Democrat Senate won’t pass. In 2012, the price tag on federal rules, which affects the expense of everything, concerned $1.8 trillion. At $14,768 per household, red tape will be the second largest item in family budgets after housing (WSJ 5/20/13).

The decline in America’s institutions as well as the related rise of red tape is exactly what Niall Ferguson calls the Great Degeneration (WSJ 6/7/13). Instead of a rule of law, there exists a rule of lawyers—the class that, together with crony capitalists, advantages from red tape. The U.S. ranks as sixth worst in the world for making it more challenging rather than simpler to do business. For increases in red tape, the U.S. is a class with Zimbabwe, Burundi, and Yemen.

Compliance prices are only a fraction in the effect. Economists John Dawson and John Seater studied opportunity costs and estimate that regulation over the past 6 decades has cut economic growth by typically 2 percentage points per year. The result is that we have been 75% poorer than we might have been within the 1949 regulatory regime. We could also have a GDP of $53.9 trillion rather than $15.1 trillion, and an average family income of $330,000 instead of $53,000. (Reason 6/21/13).

Dawson and Seater take into account potential offsetting results of regulation on output, but what about unmeasured effects on protection? John Goodman’s Law of Regulatory Impact states: “Most economic regulation, most with the time, imposes social costs on someone without changing any fundamental behavior.” He argues that a majority of health and safety regulation follows exactly the same law. For example, within the years leading up to the Occupational Safety and Health Administration (OSHA), workplace injuries and fatalities were falling at the identical rate as inside years after its passage.

The Outer Limit

The U.S. Supreme Court decision that opened the floodgates to regulation was Wickard v. Filburn, a 1942 decision where the Obama Administration based its case that ACA is constitutional within the Commerce Clause (AAPS News, May 2012). The Supreme Court held that that decision was the outer limit, along with the government can't reach beyond it to compel a person to engage in a commercial activity; i.e., it could not regulate inaction.

Roscoe Filburn was a farmer who grew more wheat compared to the 200 bushels which are exempt beneath the Agricultural Adjustment Act of 1938. He exceeded his quota of 233 bushels by about 240. He withheld this for future sale or used it to feed livestock, that was unregulated when sold. Feeding regulated wheat to unregulated livestock destined for market allows farmers to evade the quota system, and in the aggregate such activities could substantially affect interstate commerce. Thus, the Court protected a government- sanctioned cartel (American Spectator 3/14/12).

Although the decision inside NFIB case challenging the ACA placed a set limit on the Commerce Clause (AAPS News, August 2012), Wickard still stands. Liberty Legal Foundation argues that this case enabled the explosion in regulation, knowning that its reversal could bring instant economic recovery. Robert Bork wrote, however, that the choice is “too thoroughly embedded in our national life to overrule”—such is the power of precedent.

As Lawrence Gostin writes, the decision to uphold ACA “allows the nation to continue on its chosen path” (JAMA 8/8/12). This started with all the New Deal, that also brought us the Economic Stabilization Act of 1942 having its wage ceilings and element federal approval for changes. This resulted in employer-sponsored health insurance along with the discontinuous coverage that brought us the pre-existing conditions problem (Manhattan Institute Issues, October 2012).

The regulatory legacy of price controls and quotas seems to know no limits—except possibly the collapse in the economy. With the ACA same in principle as a Healthcare Adjustment and Stabilization Act—and electronic coding and reporting, it will be much easier to control medicine than wheat production.

Obama Regulations

Philosophy: In May 2008, then-U.S. senator Barack Obama said: “We can’t drive our SUVs and eat up to we want whilst our homes at 72 degrees all the time, then just expect that other countries are likely to say OK.” (http://tinyurl.com/mhsr8dl).

Cost: By October 2012, cost was $27.6 billion and 30,000 jobs. At risk: 3.2 million jobs at franchise businesses, 43,000 in medical device industry (http://tinyurl.com/mmeqt5z).

Mechanism: ACA exempts the Independent Payment Advisory Board (IPAB) in the administrative rule-making requirements that apply to all other executive agencies. This goes far beyond “fast-track authority” (Cato Policy Analysis No. 700, 6/14/12, http://tinyurl.com/6wk6t89).

Compliance: To build an exchange for Idaho (pop. 1.7 million), Leavitt Partners, founded by former HHS secretary Michael Leavitt, requested $70 million. Global accounting and consulting firm KPMG asked for $77 million. For what? “It’s hardware, it’s software, there’s infrastructure, there’s people and staffing…. There’s a lot of stuff, but it’s hard being specific” (Austin Hill, Townhall.com 11/25/12).

Government Compliance: An unpublished Congressional Research Service memorandum finds that this Administration has missed half of ObamaCare’s legally imposed deadlines (Avik Roy, Forbes 8/18/13).

 

 

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