An emergency bonfire of the regulations

So as to deploy medical services more effectively during the COVID-19 emergency, the Department of Health and Human Services has announced that it will forgo enforcement of rules restricting telemedicine, both by waiving HIPAA prohibitions on the use of everyday communications technologies like Skype and FaceTime, and by removing a requirement that reimburseable services be provided by the holder of an in-state license. At the same time, as I noted last week, many states have been relaxing rules prohibiting practice by out-of-state medical professionals (partial list here).

That’s part of a pattern in which governments are slashing many old regulations that they realize get in the way of crisis response and complicate the lives of ordinary citizens trying to work and shop under difficult conditions. My Cato colleague Chris Edwards links some of them in this post, including compilations by the Competitive Enterprise Institute and Americans for Tax Reform. (More: R Street Institute; Katherine Timpf, National Review. Hospitals and medical professionals aside, suspended rules include hours of service rules for truckers driving emergency medical supplies, requirements that Florida insurance agents keep public offices, rules forbidding the combined transport of food and liquor in Texas trucks, and federal standards restricting universities’ use of online classes. How many of these rules were unnecessary or unwise in the first place?

While movement of persons between communities may pose a danger during epidemics, movement of goods remains vital to prosperity and mutual exchange. Simon Lester points out in a Cato podcast that easing trade restrictions is a direct way to address difficult bottlenecks in emergency medical supplies. Relatedly, recent tariffs on medical supplies haven’t been helpful, encouraging large factories overseas to prioritize customers outside the U.S. (earlier).

In a reaction to the financial strains caused by the outbreak, the feds have been flooding the banking system with liquidity, both by relaxing regulations and through central bank operations. Cato’s Diego Zuluaga in a podcast distinguishes between liquidity objectives and (what is rightly more controversial) bailout objectives.

4 Comments

  • This may be a big one: providing more flexibility to banks to address the immediate / emergency needs of their commercial customers.

    https://www.fdic.gov/news/news/press/2020/pr20036a.pdf

  • What sort of actions are needed to prevent these regulations from returning? They are a mixture of federal and various state’s laws, so the focused political pressure required could get diffused.

  • […] the regulatory barriers that had constrained it [Shirley Svorny, Cato Policy Analysis; earlier here, here, and […]

  • […] feds and states ditch trucking rules to keep the deliveries rolling [Christian Britschgi, earlier on bonfire of the […]

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