Medicare GME
practice acts and Medicare COPs as they
and state regulation of medical records as
relate to physician offices, the National
they relate to offices/clinics for physicians,
payments impose
Practitioner Databank, commercial limits on
dentists, and other health professionals; and
a net cost of $4.3
the practice of medicine (including corporate
Medicare graduate medical education (GME)
billion.
practice of medicine regulations and adver-
payments. These regulations result in $15.1
tising restrictions imposed by the Federal
billion in costs and $11.1 billion in benefits.
Trade Commission and states), and limita-
Medicare GME payments account for all of
tions on hours worked by medical residents.
the $4.0 billion in net costs. These payments
These regulations cost Americans $7.7 billion
impose a net cost of $4.3 billion, taking into
annually, with corresponding benefits of
account gross federal payments of $8.2 bil-
$5.7 billion. As on the facilities side, the sin-
lion (which are assumed to be transfers, i.e.,
gle largest net cost is attributable to profes-
benefits to recipient hospitals and costs to
sional accreditation/licensure (net cost $1.8
taxpayers) and then accounting for the effi-
billion), even after accounting for $4.7 billion
ciency losses associated with tax collection.
in benefits in the form of higher earnings for
selected health professionals attributable to
Quality-Related Professionals Regulations
the restriction in supply arising from such
Quality related includes professional ac-
regulations.
creditation and licensure (e.g., state medical
Table 4
Cost of Health Insurance Regulation (millions of 2002 dollars)
Costs
Benefits
Type of Regulation
Expected
Minimum
Maximum
Expected
Minimum
Maximum
Net Cost
Percent
Access
81,412
58,119
124,159
72,281
40,939
144,940
9,131
-29.0%
HMO Act of 1973
-
-
8,330
-
-
8,037
-
0.0%
Anti-discrimination restrictions
214
14
7,414
114
6
4,424
100
-0.3%
Mandated health coverage
74,928
55,059
92,089
68,283
38,188
123,726
6,645
-21.1%
Employer mandates
-
-
39
-
-
73
-
0.0%
Continuation of coverage
44,321
40,597
48,545
29,294
18,488
41,957
15,027
-47.8%
Benefit mandates
30,606
14,461
43,505
17,125
10,943
45,211
13,482
-42.8%
Health provider mandates
-
-
-
12,156
8,757
15,950
(12,156)
38.6%
Person mandates
-
-
-
9,707
-
20,535
(9,707)
30.9%
Insurance Market Reforms
5,386
2,297
15,241
3,066
2,121
7,458
2,321
-7.4%
Health plan conversion regulations
44
21
96
-
-
264
44
-0.1%
High-risk pools
840
728
990
818
623
1,031
22
-0.1%
Costs (w/o ERISA)
10,707
7,393
23,933
8,960
6,779
24,873
1,746
140.1%
ERISA
793
180
4,043
46,636
26,527
75,973
(45,842)
N/A
HIPAA administrative simplification
846
602
1,119
3,289
2,340
4,349
(2,443)
7.8%
Insurance privacy regulations
2,032
1,445
12,009
3,265
2,323
4,317
(1,233)
3.9%
Medicare as secondary payer
3,220
2,978
3,490
1,936
1,663
3,613
1,283
-4.1%
Medigap minimum standards
1,017
119
2,900
-
-
-
1,017
-3.2%
General Insurance/HMO Regulation
3,592
2,249
4,415
470
453
12,594
3,122
-9.9%
Quality
7,184
2,692
24,597
3,684
2,008
11,072
3,500
-11.1%
Medicare + Choice COPs
245
148
631
-
-
-
245
-0.8%
Professional rights
-
-
-
-
-
-
-
0.0%
Patient protections
6,939
2,544
23,967
3,684
2,008
11,072
3,255
-10.3%
Grand Total (w/o ERISA)
99,303
68,205
172,689
84,925
49,726
180,885
14,377
100.0%
Note: Figures may not add up to totals due to rounding.
12