Leave Home Care Alone

November 21, 1996 • Commentary
This article originally appeared in USA Today.

Home health care is doing a remarkable job of providing affordable health care for millions of Americans. So, naturally, the government wants to regulate it.

Although still in its infancy, home health care has already shown that it can reduce health care costs, particularly for the elderly. Nursing home care costs as much as $150 per day, but a home health care aid costs less than $20 per hour, for one or two hours per day.

Despite anecdotal horror stories, there is no evidence of widespread abuse in the industry. There are already laws on the books against fraud, theft, and abuse. Home health care providers who violate those laws should be vigorously prosecuted and severely punished. We don’t need a new regulatory bureaucracy to strangle this promising industry in its crib with paperwork crimes and volumes of regulatory minutiae.

Numerous studies have shown that licensing and other regulation of the medical professions have done little to improve patient care or prevent abuse. For example, medical economist Gary Gaumer reviewed all the available literature on medical licensing and regulation and concluded that “tighter controls do not lead to improvements in the quality of service.” Likewise, David Young, examining licensing and regulatory requirements for a variety of professions concluded that such regulation has “at best a neutral effect on quality and may even cause harm to consumers.”

While increased regulation will do little to protect consumers, it will almost certainly increase costs. Regulations will add three costs: (1) the cost of a massive new regulatory bureaucracy; (2) the cost of complying with the regulations; and (3) the cost of decreased competition within the industry. Increasing costs may end up putting home care out of reach of many Americans.

Before turning to government, we should look at the variety of nongovernmental measures that can be taken to ensure the quality of providers. For example, the industry can give its seal of approval to providers that meet certain standards, much the way Underwriters Laboratory certifies electrical products.

If Americans really mean it when they say that they want the end of big government, they cannot expect a new government bureaucracy to solve every perceived problem.

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