Division Comments on Proposed State Healthcare Laws

Division Update Spring 2016

The Division recognizes that states balance a wide array of concerns when they pass legislation. That is why the Division welcomes the opportunity to share with state lawmakers both its view on how robust, competitive markets benefit U.S. consumers and how proposed legislation may impact competition in those markets.

States Where the Division Has Engaged in Competition Advocacy

States Where the Division Has Engaged in Competition Advocacy

The Division has a long history of working with the FTC to advocate for competition at the federal and state level. Most recently, the Division and FTC joined forces to respond to requests for advice about competition issues related to healthcare legislation in three states: Virginia, South Carolina, and Massachusetts. Two letters concerned state certificate of need laws, while the third dealt with the regulation of the optometry profession.

Certificate of need laws require healthcare providers to obtain the approval of state regulators before initiating certain projects. For example, healthcare providers in some states must obtain certificates of need from state regulators before building new hospitals or providing cardiac services. These rules create a barrier to entry for new healthcare providers. And there is little evidence that such rules substantially further their stated goals of limiting healthcare costs, improving quality of care, or improving healthcare access in underserved areas.

This year, the Division and FTC also welcomed the opportunity to recommend that lawmakers in Virginia and South Carolina consider eliminating or limiting their certificate of need laws. These are the latest in a long history of the agencies’ efforts to encourage states to consider eliminating such laws.

The Division and FTC also provided advice regarding the regulation of the optometry profession in Massachusetts. The Massachusetts legislature is considering a bill that would let optometrists provide certain treatment to glaucoma patients. Every other state and the District of Columbia already allows optometrists to provide some glaucoma treatment. Because unnecessarily restrictive regulation of professions harms competition, the Division and FTC historically have encouraged states to avoid restrictions that are not necessary to address well-founded public interest concerns (such as patient safety concerns).

In this particular case, the agencies pointed out that allowing optometrists to treat glaucoma could improve patients’ access to treatment because more optometrists than ophthalmologists practice in the U.S. The agencies also noted that relaxing the state’s restrictions could decrease the prices paid by glaucoma patients given that increased competition will likely drive prices down. Improved access and lower prices may allow more patients to receive treatment faster. Because of the potential benefits to consumers, the agencies encouraged Massachusetts to consider relaxing the prohibition on optometrists’ treatment of glaucoma.

Updated April 11, 2016

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