Three ways states can reduce health care costs for businesses and consumers

Managing health care costs and enhancing mental health benefits will be top priorities for U.S. employers over the next two years, according to a March 2022 survey of over 600 companies employing 10 million workers. The result isn’t surprising: Health care costs have been a significant expense for employers for many years.

With federal mandates on what health insurance can and cannot look like, there isn’t much that states can do to reverse those trends. But there are policies states can pursue that would save money and increase access to health practitioners without requiring mandates or price caps.

The past couple of years has put a spotlight on health care delivery and access. States responded to the pandemic by easing regulations that were restricting access to both services and providers. Those actions likely saved lives. States can and should solidify policies that expand patient choice, increase competition, and stimulate innovation. By making those changes permanent, they’ll likely help businesses and individuals save money on their health care costs.

First, states should eliminate laws preventing nurse practitioners from working to the full extent of their education, training and certification. Just last month, Kansas Gov. Laura Kelly, a Democrat, signed a law passed by the Republican-controlled legislature that allows nurse practitioners to practice independently without the supervision of a physician. There are now 26 states including Washington, D.C. and two U.S. territories allowing full independent practice authority.

People are familiar with nurse practitioners and often see them when they are sick. It’s also why 81 percent of registered voters believe that health care providers should be allowed to provide services in alignment with the full scope of their education and training. After all, nurse practitioners receive master’s or doctorate degrees and clinical training and perform a wide range of physical and behavioral health care services. Research has shown that nurse practitioners can manage 80-90 percent of the care provided by primary care doctors. This frees up doctors to focus on the 10-20 percent of patients with more complex issues.

Another opportunity for addressing health care costs, including mental health care, is expanding telehealth across state lines. States should allow patients to consult doctors of their choice wherever they are physically located. Nearly all states require health providers to get a license in the state where their patients are located, even though the education and training of these providers is standardized across the country.

Millions of Americans enjoyed the benefits and cost savings of telehealth visits during the COVID-19 pandemic. The survey found that nearly all employers expect to offer virtual care to meet demand for medical and behavioral health services. It saves both direct costs related to the visit and indirect costs related to time, travel and time off work.

And finally, 38 states restrict much-needed competition of health care services and facilities. These restrictions — called certificate of need (CON) laws — reduce competition and limit access to new technologies, providers, facilities and services. Decades of research on CON laws has proven they increase costs and reduce access but don’t increase the quality of services. In a rare action, the federal government repealed its mandate and funding for statewide CON laws in 1987, and Washington continues to encourage states to get rid of these laws because of their anti-competitive nature.

Businesses may not know specifically about CON laws, but they are concerned about the effects of them. The March survey says that 73 percent of employers cited provider consolidation as a challenge to effectively deliver on their health care.

Anti-competitive measures — such as scope of practice restrictions, prohibitions on using mobile phones to see a doctor from anywhere, and CON laws — mean less competition. Lack of competition promotes consolidation, stifles innovation, and increases prices. States should help businesses manage their health care benefit costs, especially as the pandemic subsides and the economy settles in for what seems like a bumpy ride.

Greg George is the director of legislative affairs at the Mackinac Center for Public Policy, a research and educational institute located in Midland, Mich.