The United States health care system is plagued by inefficiencies that drive up costs and limit access to care. The Department of Government Efficiency has a crucial role to play in addressing this challenge. As a physician, I often strive to practice cost-conscious care whenever possible. Three common-sense broad reforms—repealing Certificate of Need (CON) laws, implementing universal physician licensing, and advocating for site-neutral payment reform—offer significant opportunities to reduce health care spending while improving patient care.
Repealing Certificate of Need (CON) laws
Certificate of Need (CON) laws are state regulatory mechanisms that require health care providers to obtain state approval before making significant capital expenditures or expanding services. These laws were originally designed to control health care costs by preventing the duplication of services and ensuring that new facilities were necessary for the community. However, CON laws often have the opposite effect. By restricting the entry of new providers and limiting competition, they enable existing facilities to maintain high prices and limit patient choice. Studies have shown that repealing these laws can lead to increased competition, lower prices, and improved access to care. For instance, in states that have repealed CON laws, there has been a notable increase in the number of health care facilities, which has enhanced access to care, especially in rural areas. Estimates suggest that repealing CON laws nationwide could save the health care system approximately $500 million annually. Additionally, during the COVID-19 pandemic, temporary suspensions of CON laws allowed for a rapid increase in hospital bed capacity, demonstrating the potential benefits of permanent repeal.
Implementing universal physician licensing
The current system of state-by-state physician licensing creates unnecessary barriers to health care delivery. These burdensome requirements hinder the mobility of health care providers, exacerbating shortages in underserved areas. Maintaining multiple licenses also imposes significant administrative costs on physicians, estimated at over $1 billion annually by the Niskanen Center. Universal physician licensing (similar to that of driver’s licenses) would not only reduce these costs but also facilitate the delivery of telemedicine services, improving access to care, particularly in rural areas. For example, states that have adopted universal licensing recognition have seen an increase in health care utilization and a reduction in the number of patients who forgo care due to cost. This reform would also support military families and other mobile populations by allowing health care providers to practice across state lines without the need for multiple licenses.
Universal physician licensing would function similarly to state driver’s licenses. Just as a driver’s license issued in one state is recognized across all states, a universal physician license would allow doctors to practice in any state without needing to obtain separate licenses. This system would streamline the licensing process, reduce administrative burdens, and enhance the mobility of health care providers.
Advocating for site-neutral payment reform
Another significant source of waste stems from the current payment system, which favors hospital settings over outpatient facilities for the same services. This discrepancy incentivizes hospitals to acquire outpatient practices and charge inflated rates, driving up costs for patients and insurers. Site-neutral payment reform, which would equalize reimbursement rates regardless of location, would address this inefficiency and encourage the most cost-effective delivery of care. The Medicare Payment Advisory Commission (MedPAC) has estimated that site-neutral payment policies could save Medicare $30 billion over a decade. Extrapolating these savings to the broader health care system suggests potential cost reductions exceeding $100 billion. Moreover, such reforms could reduce the financial incentives for hospital consolidation, promoting a more competitive and efficient health care market.
Conclusion
The Department of Government Efficiency has a unique opportunity to champion three common-sense reforms that will reduce health care waste by hundreds of billions of dollars annually. These reforms not only address critical cost-containment issues but also promise to improve access to care, particularly for underserved populations.
Aamir Hussain is a dermatologist.
