Question

Week 4 Write a 175- to 265-word response to the following questions: How has government regulation and oversight influenced health care products and services? Provide an example. Do you think this regulation and oversight does more to help or hurt health care? Please explain.

Answer 1

With Congressional oversight, United States health agencies develop laws designed to protect public well-being. The Department of Health and Human Services (HHS) oversees the general health issues and concerns of all American citizens, spearheading initiatives that improve public health and further medical research. The mission of the HHS entailed improving patient outcomes and reducing medical costs. Throughout time, the HHS has worked toward such goals by supporting various new laws. As a result, the following eight acts of legislation have had a significant impact on health in America.

Healthcare Quality Improvement Act of 1986 (HCQIA)

Medicare

Medicaid

Children’s Health Insurance Program (CHIP)

Hospital Readmissions Reduction Program (HRRP)

Health Insurance Portability and Accountability Act (HIPAA) of 1996

Patient Safety and Quality Improvement Act (PSQIA) of 2005

Affordable Care Act of 2010

THE NATURE OF HEALTH CARE REGULATION

The pervasive nature of health care regulation stems from the fundamental concerns that are at stake. Most observers acknowledge that some form of oversight is needed when factors as essential as life and health are involved. Even those who are especially suspicious of heavy-handed government bureaucracy see a public interest in some form of external supervision of this field. Policy debates, for the most part, swirl not around whether oversight should exist but, instead, around the way it should be structured.

However, the present regulatory structure is neither uniform nor consistent. A broad range of regulatory bodies and programs apply in different ways to various aspects of the industry. Health care regulations are developed and enforced by all levels of government—federal, state, and local—and also by a large assortment of private organizations. At times, they operate without coordination

THE ORIGINS AND EXTENT OF COMPLEXITY

The origins of this complex system lie in a series of turf wars between opposing interests that have been waged in one form or another over the past 150 years. The contest between federal and state authority is enshrined in the federalist structure of American government, and the debates of today echo early disputes over which kinds of power should reside at each level. Most of the power to govern day-to-day activities resides with the states under the Constitution, but it is subject to pre-emption at the federal level when various enumerated concerns come into play, such as defense, foreign relations, and interstate commerce.

This division of control created a source of ongoing tension in health care oversight from the start. To take a longstanding example, basic oversight of many of the central players in the health care system, including physicians, hospitals, and insurance companies, is accomplished by agencies at the state level. In every case, however, it is coordinated by federal authorities. Similarly, most public health programs, including sanitation, restaurant inspections, and investigations of epidemics, are the responsibility of state and local regulators, but the federal Centers for Disease Control and Prevention (CDC) serves as an essential resource for collaboration on a national level.

Private regulators entered the scene in the early 20th century. The American Medical Association (AMA) sponsored the creation of a number of organizations that remain central today in the oversight of the medical profession, including those that accredit medical schools, administer licensure examinations, and certify specialists. These bodies supplement the work of governmental regulators. State medical boards, for example, use privately administered examinations in granting medical licenses, and the Medicare program relies on specialty certification as an indicator of physician quality. Along similar lines, the hospital industry accredits its own members as a supplemental step to state licensure through the Joint Commission (JCAHO).

THE REGULATORY MAZE: TWO EXAMPLES

As a result of this network of oversight bodies, those individuals and organizations subject to regulation must turn to multiple competing authorities for guidance. Two examples illustrate this dynamic.

The path to practicing medicine is paved with an array of regulatory hurdles implemented by an assortment of bureaucracies. A potential physician must attend a medical school that has received accreditation by a private body, take a national examination administered by another nongovernmental organization, obtain licensure from a state medical board, complete a hospital residency that is funded and governed by the federal Medicare program, achieve certification from a private specialty board, and obtain clinical privileges at a hospital that may operate as either a private or public entity. To receive payment for services and actually earn a living, it is often also necessary for a physician to qualify for participation in Medicare and in the network of a managed care organization (MCO).

The path to marketing a new drug is similarly cumbersome. A pharmaceutical company must start by protecting its invention with a patent that is issued by the federal Patent and Trademark Office (PTO). It must then receive permission to conduct clinical testing from the federal Food and Drug Administration (FDA), which for many products culminates in review of the results by an advisory committee composed of private scientists. After approval for marketing is received in the form of a New Drug Approval (NDA), the manufacturer must adhere to marketing restrictions contained in the NDA.

Next, in order to sell the drug widely, the manufacturer must obtain a place for it on the formularies of private pharmacy benefit management companies (PBMs), which administer reimbursement plans. Ideally, the drug will also be included in the standards of care promulgated by private medical specialty societies.

After all of these steps, the drug still cannot be sold unless it is prescribed by physicians and is dispensed by pharmacists who are subject to licensure and a range of other regulatory requirements.