Commentary # 6 by Paul Francis
Week of January 29th, 2024
This commentary is available as a PDF here:
It has been about four months since we launched the Step Two Policy Project website and published our first essay on Substack. Over that time, we have posted 14 papers of varying types. We’re starting to get a better sense of these, and I thought it would be helpful to briefly describe the different types of papers we are writing.
We may be slicing the bread too thin with these distinctions, but we call our longer whitepapers Policy Briefs, which tend to be a fairly comprehensive discussion of the issue. Our papers on Democratization of Health Data, Information, and Policy Analysis and The Challenge of Financially Distressed Hospitals in New York fall into this category. We call the shorter but more focused whitepapers Issue Briefs, such as the Issue Brief on Using Health Data and Information to Better Measure the Affordability of Healthcare, which we published last week. The Policy Briefs and Issue Briefs try to be insightful and include a lot of well-sourced data to support our arguments.
When I started to write shorter essays and called them “Paul’s Updates,” they really were “updates” about the whitepapers we were working on. I now realize that these shorter essays have become more of a thought piece (and less of a research paper) on issues that interest me. It’s important that these essays be well-informed, but they contain more opinion and less data than the Briefs. Given that, I’ve decided to rename these shorter essays “Paul’s Commentary.” I borrowed the idea of numbering the Commentaries, Policy, and Issue Briefs from Adam Tooze, whose Chartbook newsletter on Substack is a continuing inspiration on how to make esoteric policy subjects interesting. The numbering probably makes more sense when, like Tooze, you are up to #262, but that’s our aspirational goal, so we will keep up the numbering for now.
What I wanted to reflect on today is something I first observed upon coming into government in 2007 after 25 years in the private sector. Compared to the private sector, government over-engineers against risk, for good reasons and bad. The good reason is that mistakes in government can be very costly and sometimes dangerous. Mistakes in government are also hard to reverse. It is a truism that once government has conferred a benefit, it is very hard to take it away; once legislation has been enacted, it’s very hard to repeal. As such, government cannot afford to follow the old Silicon Valley maxim of “move fast and break things.” Some level of process and checks and balances is necessary, and some level of regulatory control is appropriate.
The problem with government, however, similar to the problem with decision-making in large corporations, is that the same level of process is applied to all decisions, whether big or small. Jeff Bezos famously made this observation and contrasted it to startups that operate with a sense of urgency and a bias toward action. That’s why, Bezos said, “Every day at Amazon is Day One, because Day Two equals stasis and death.”[1] For stakeholders and regular citizens waiting for New York State government to take action on issues big and small, I’m sure it can feel like “stasis and death.”
The tendency of government to over-engineer against risk is especially clear in healthcare. One reason for that is that the healthcare system itself also over-engineers against risk. I believe the primary reason for this approach in the healthcare system is the culture of healthcare, which is designed to avoid medical errors or omissions with little regard to a cost-benefit analysis. Even though I think culture is the main culprit here, it should not escape notice that healthcare providers generally have a financial incentive to over-test and over-treat. If patients engaged in an implicit or explicit cost-benefit analysis, that might serve as a counterweight. But it is the rare patient who questions the authority of the healthcare system when ordering a test or procedure. Moreover, the patient often has no financial incentive to push back because a third party is paying the bill.
Since both government and the healthcare system are preternaturally inclined to over-engineer against risk, it is not surprising that burdensome requirements and restrictions are marbled throughout statutes and regulations governing the healthcare system. These requirements and restrictions are usually justified on the basis of protecting the patient. In the case of healthcare workforce practice restrictions and scope of practice provisions, however, the effect, and many would say the purpose, of these requirements and restrictions is less about patient safety and more about the protection of particular “guilds” of providers – physicians, nurses, and all the way down the line – from competition or disintermediation by providers outside the guild. The increased costs to the healthcare system that result from these anticompetitive policies represent an invisible healthcare tax on individuals, employers, and taxpayers.
One way to identify requirements and restrictions that generate burdens that exceed their benefits is to examine rules that were suspended by Executive Order during the Public Health Emergency of the COVID-19 pandemic. These Executive Orders[2] permitted such matters as allowing:
insurance coverage for healthcare services delivered via telehealth for an expanded universe of technology, settings and locations, and services;
physicians, nurses, and other clinical titles with licenses in good standing from other U.S. states or Canada to practice in New York without a New York license;
advanced practice registered nurses with a doctorate or master’s degree specializing in the administration of anesthesia to practice without physician supervision;
nurse practitioners to practice without written practice agreements or collaborative relationships with physicians; and
several other flexibilities related to graduates of foreign medical schools, supervision of physician assistants, laboratory testing related to COVID-19, remote lab supervision, issuance of non-patient-specific orders, the practice of EMS personnel, and healthcare providers’ record-keeping requirements.
We have not heard of problems that emerged because of this increased flexibility. Nevertheless, efforts by the administration in previous years’ budgets to make this flexibility permanent were widely opposed by different provider groups and roundly rejected by the legislature, with the exception of nurse practitioners’ scope of practice.[3]
Comparing New York’s scope of practice policies with those of other states is another good way to identify targets for reform. Fortunately, the National Conference of State Legislatures (NCSL) Scope of Practice Policy legislative database provides information about scope of practice legislation that’s been introduced (and its disposition) in all 50 states. The NCSL Scope of Practice resource also includes a 50-State Scope of Practice Landscape for a selection of healthcare professions – behavioral health providers, advanced practice registered nurses, optometrists, oral health providers, pharmacists, and physician assistants. Many states adopted similar healthcare professional flexibilities during the COVID-19 Public Health Emergency, but there are significant differences across states in baseline scope of practice and interstate practice provisions.
Even beyond the unsuccessful effort to extend the COVID-19 pandemic waivers, successive administrations have sought unsuccessfully to modify some of these anticompetitive policies, which reduce access to care while increasing the cost of healthcare in New York. To its credit, the Hochul administration is trying again in the FY 25 Executive Budget with several proposals to expand scope of practice and reduce licensure restrictions.[4] One of the focus areas of the Step Two Policy Project is oral health, which is a particularly good example of how anticompetitive practices can result in a lack of access to care. We will address this further in our upcoming Policy Brief on the FY 25 Executive Budget.
A major obstacle in achieving these reforms has been that most professional licensure is governed by the Education Law rather than the Public Health Law, and regulatory authority is vested in the State Education Department and the Board of Regents, rather than in the Department of Health and the Executive Branch of the administration. Moreover, legislative reforms in these areas must go through the Assembly and Senate Education Committees rather than the Health Committees.
This authority has been jealously defended by the Education bureaucracy despite repeated Executive Budget proposals to move the authority to the Department of Health, which regulates many of the healthcare settings in which these professions practice; already certifies or licenses EMS personnel, home health aides, and nursing home administrators; and houses the Office of Professional Medical Conduct that investigates complaints about physicians, physician assistants, and specialist assistants.
All of these restrictions that over-engineer against risk in the name of patient protection are relevant to the Issue Brief we published last week on the affordability of healthcare. It’s easy to believe that the ever-increasing cost of healthcare is as inexorable as global warming. But in reality, the cost of healthcare in New York reflects decisions large and small made by policymakers and practices maintained by the healthcare system itself without much regard to the value added.
I would note that in addition to reducing access to care while raising costs, the status quo runs counter to two significant trends in healthcare. The first is the healthcare workforce staffing crisis, a topic we plan to address in more detail after the Budget. The increased vacancies for nurses and other clinical staff across all clinical settings since the COVID-19 pandemic, combined with new staffing mandates, may lead to the conclusion that the only way to deal with the current staffing crisis is to broaden the potential field of providers.
The second trend the status quo runs counter to is the growing demand for empowerment of healthcare consumers. At a time when access to information about health has never been greater and when the prospect of true price transparency has never been closer, people want to have a greater ability to manage their own healthcare. Many existing restrictions and healthcare system practices reflect a paternalistic mentality among healthcare providers that reduces the agency of healthcare consumers. New technologies and business models will make it harder to deny consumers the convenience and savings that would result if these burdensome restrictions and paternalistic practices were diminished.
There have been steps in the right direction in recent years. To cite one example, until a few years ago, labs often would not provide patients with the results of their own blood tests – they would only be sent to the doctor who ordered the test. Now, with the federal implementation of the “Cures Rule” of the 21st Century Cures Act, healthcare providers are required to give patients access to all of the health information in their electronic medical records “without delay” and without charge.[5] Health systems and providers make your full health records available through patient portals, for example, Epic’s MyChart.
My father used to quote W.C. Fields, who said, “If at first you don’t succeed, try and try again. Then quit. Don’t be a damn fool about it.” Advocating for more flexibility in the healthcare system in terms of licensing requirements and the expansion of scope of practice can often feel like tilting at windmills in a quixotic quest for change and reform. The same is true for pushing government to operate in a more nimble and responsive way that recognizes that risks are to be managed, not prevented at all costs so that the cure becomes worse than the disease. Quixotic quest or not, our belief at the Step Two Policy Project is that right does eventually make might. We hope to contribute to that goal in a small way by continuing to highlight ways that the governmental and healthcare systems could work better.
Paul Francis
January 31, 2024
[2] These actions were implemented by Governor Cuomo’s Executive Order 202 (and subsequent E.O. 202 renewals and modifications) during the COVID-19 pandemic and expired on June 25, 2021 and Executive Order 4 (and subsequent E.O. 4 renewals and modifications), a declaration of a Statewide Disaster Emergency Due to Healthcare Staffing Shortages in the State of New York, issued by Governor Hochul, which fully expired June 22, 2023.
[3] In April 2022, the flexibilities that were adopted through the Governor’s Executive Orders were adopted and the Nurse Practitioner Modernization Act was amended to permit NPs with greater than 3,600 hours of experience to practice fully independently, without the need for specific relationships with physicians or hospitals.
[4] These include permanently authorizing pharmacists to direct limited-services laboratories and order and administer COVID-19 and flu tests, permanently authorizing physicians and nurse practitioners to order non-patient specific regimens to RNs for COVID-19 or influenza virus tests and vaccinations; expanding the scope of practice for dentists, dental hygienists, physician assistants, and certified nurse aides; and permitting New York to enter the Interstate Medical Compact for licensed physicians and the Interstate Nurse Licensure Compact for RNs and LPNs; extending authorization for community paramedicine programs; and expanding the scope of practice for OPWDD direct support staff in non-facility-based programs. Some of these proposals have been included in previous executive budgets and some are new.
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