The question of how to regulate U. S. health care and for what purpose remains unanswered in this country. If we believe that the primary goal of regulatory oversight is to protect patients and families from poor care, fraud and abuse, we need to question what is happening now, does it work, and what changes should be made in the regulatory process?

Today’s Ineffective Health Care Regulation

We already have an immense regulatory burden that is costing some $39 billion a year in attempting to achieve compliance in nine domains: quality reporting, new models of care/value-based payment models, meaningful use of electronic records, hospital conditions of participation, program integrity, fraud and abuse, privacy and security, post-acute care, and billing and coverage verification requirements. Health systems, hospitals, and post-acute care providers have to comply with some 629 discrete regulatory requirements across these nine domains, according to a recent report by the American Hospital Association.

We can make the case that this high regulatory burden has not been effective in ensuring safe and effective patient care, but also that deregulation across the board will make matters even worse as budgets and staffs of necessary regulatory agencies are cut. These examples across the health care system make the point.

Insurance Industry

Administrative actions by HHS have already dropped advertising for and shortened the ACA enrollment period, scaled back maintenance of its website, relaxed IRS penalties for not getting insurance under the ACA’s individual mandate, withdrawn federal assistance to states as their counties without any insurer multiply, and spread disinformation that discourages enrollees of the ACA’s marketplace. The Trump administration supports selling insurance across state lines (which allows insurers to select states with the most lax regulations), radical cuts in Medicaid and Medicare, shifting control of health care back to the states, and marketing short-term plans lasting less than a year in order to get around the ACA’s requirements. All of these policies will lead to higher prices and costs of health insurance and care, less value of health insurance, and will increase by millions the numbers of uninsured and under-insured Americans.

Drug industry

Big PhRMA has long pushed for faster action by the FDA on drug approvals with less rigorous oversight while resisting any efforts that would allow importation of drugs from other countries or the government to negotiate drug prices. Since 1962, the FDA has required “substantial evidence” of a drug’s efficacy before granting approval on the basis of controlled clinical trials, but the industry argues for less rigorous criteria that could perhaps be provided by its own marketing “trials.” The industry has recently brought out a new argument based on the First Amendment to evade drug safety rules and sell more medications for off-label marketing of unapproved drugs.

Dr. Scott Gottlieb, a physician, investor and long advocate for quicker drug approvals, is the new commissioner of the FDA. On the side of a continuing rigorous approval process, however, is the fact that almost one-third of FDA-approved drugs have had a safety issue detected later on that required withdrawal from the market or warnings of new risks to the public. Tighter regulation of drug approvals is indicated by the FDA’s failure to protect patients taking prescription drugs from more than 81 adverse reactions that have resulted in 2.7 million hospitalizations.

Medical Devices

The FDA also regulates medical devices, such as heart valves, hip and knee replacements. Industry regularly lobbies the agency for faster reviews based on less evidence of efficacy and safety, but we already have had many examples showing that more rigor is needed in the approval process. A 2014 study by researchers in JAMA Internal Medicine found that 42 of 50 selected medical devices lacked enough scientific evidence to verify their safety and effectiveness.

Johnson & Johnson’s metal artificial hip replacement, the A.S.R., is a classic example of what can go wrong by an expedited FDA review. It had a high failure rate, with many patients disabled by pain as the device shed metal debris, so that many devices had to be removed with additional surgery. Before its delayed recall, the A.S.R. accounted for almost one-third of an estimated 250,000 hip replacements performed each year in this country.

As in the case of drug oversight, the FDA is hampered in its mission by underfunding, insufficient authority, cozy ties with the very industries it is regulating (and which provide some of its funding), and often political interference.

There are many examples across the system whereby patients are harmed by restricted access due to unaffordable prices and/or poor quality of care leading to worse outcomes. Regulators through the Federal Trade Commission have taken a blind eye to increasing consolidation that invariably results in increased prices through greater market share as well as more bargaining power with private insurers. Examples are legion, such as:


Although the nation’s hospitals have been subject to federal oversight dating back to 1965 when Medicare and Medicaid were enacted in order for them to receive payments from these programs, there is no rigorous safety program in place to ensure  quality of care. Most hospitals are accredited by a Joint Commission with a board largely made up of executives of health systems it accredits as well as members named by health care lobbying groups. According to an in-depth national study of hundreds of inspection reports by the Wall Street Journal  between 2014 and 2016, the vast majority of hospitals found to have safety violations retain full ‘Gold Seal of Approval.’ study of some 22 million hospital admissions found that patients are three times more likely to die in the worst hospitals, with 13 times more medical complications, compared to the best hospitals.

Nursing Homes

Two-thirds of the country’s nursing homes are for-profit, with more than one-half in large corporate chains where the mission is to enhance financial bottom lines, not quality patient care. Compared to not-for-profit nursing homes, for-profit chains that are typically investor owned, have lower staffing levels, worse quality of care, and higher death rates. A 2012 report by the Inspector General’s Office (OIG) found that for-profit nursing homes overbilled Medicare by $1.5 billion a year for treatments that patients didn’t need and never received. Life Care Centers of America Inc, one of the major nursing home chains, settled the largest claim yet of $145 million with the federal government in 2016 for violations of the False Claims Act for having provided unreasonable and unnecessary therapy to many patients.

Dialysis centers

This pattern of poor care continues at under-regulated for-profit dialysis centers, 90 percent of which are in corporate chains. Mortality rates for the nation’s two largest for-profit chains are 19 to 24 percent higher than for not-for-profit chains.


Two-thirds of the country’s hospices are for-profit, and also follow this same pattern—compared to their not-for-profit counterparts, for-profits offer fewer services and provide worse quality of care.

Is Deregulation the Answer?

The Republican-controlled Congress, in concert with the Trump administration, has put deregulation on the front burner of its policies. The unproven and incorrect theory holds that unfettered markets will regulate themselves through competition, and that regulations kill jobs and hold back the economy. Deregulation across the board has also been pushed by such groups as the Freedom Caucus on the far right, the Chamber of Commerce, the National Association of Manufacturers, and corporate lobbyists. Soon after his inauguration, Trump issued an executive order calling for the elimination of two existing regulatory safeguards for every new one adopted, which has been called unconstitutional by Public Citizen in its countering lawsuit. Steve Bannon, still a major influence on Trump’s policies, has called for a war against regulation and for “deconstruction of the administrative state.”

There are many reasons for the failure of our current regulatory attempts to assure Americans of safe and effective health care. These include the financial gain by corporate stakeholders to maintain the status quo where the government (and taxpayers) can be over-billed for unnecessary and sometimes harmful services, overly complex and often meaningless measures of “quality,” our dysfunctional multi-payer financing system without enough public accountability, the current business incentives of our mostly private system to profit from providing more services, regardless of their value to patients, and political interference that protects corporate interests and providers of services more than patients. Based on the these factors, deregulation through policies being advanced by the Republican-controlled Congress and the Trump administration would just make matters worse.

We have lost sight of the principal mission of our health care system—the best possible care of patients. Despite being so wasteful and overwhelming, current regulatory efforts don’t work, as documented  by previous examples of poor care throughout the system. Dr. Don McCanne, family physician and past president of Physicians for a National Health Program (PNHP) makes this cogent observation as to how best to regulate U. S. health care in a more productive and effective way:

A quick look at the nine domains of regulatory overload is all you need to be reminded of the nightmare created by these evolving requirements. Inefficiencies, wasted resources, and provider burnout ensue . . .  Most of the recoverable administrative waste is in the private sector. We spend over a trillion dollars a year on administration, and somewhere around $300 to $500 billion is recoverable merely by transitioning to a well-designed single-payer [financing] system. 

—McCanne, D. Quote of the Day, The cost of  regulatory overload, October 27, 2017.)

Toward More Effective Approaches to Regulation

If we have the political will to look at real solutions to this big problem that is so costly and harmful to our population, help could be on the way in the form of two bills now in the Congress—Bernie Sanders’ (I-VT) S. 1804. Medicare for All Act of 2017 in the Senate with 18 co-sponsors and John Conyers’ (D-MI) H.R. 676. Expanded & Improved Medicare for All Act of 2017 in the House, with 125 co-sponsors. These bills can transition us over to universal coverage for all Americans, with simplified administration and less bureaucracy while making all necessary health care available for everyone and providing better health outcomes for patients and our population.

Democrats and a growing number of Republican legislators need to wake up and deal with the big picture in health care before they are ushered out of office in the coming election campaigns of 2018 and 2020.

John Geyman, M.D. is the author of Common Sense about Health Care Reform in America (2017), and Crisis in U.S. Health Care: Corporate Power vs. The Common Good, and The Human Face of ObamaCare: Promises vs. Reality and What Comes Next