With the health sector approaching one fifth of GDP, health services regulation represents one of the leading areas in which the individual freedom of Americans is inhibited daily. Indeed, the health sector is arguably the most heavily regulated industry in the U.S. economy. Consequently, many of the current problems in the U.S. health care system can be attributed to the stifling of market forces that might otherwise lead to the greater efficiencies and continuous quality improvement observed in other less regulated areas of the economy. It can be said without exaggeration that in one form or another, health services regulation touches the life of every American. Recent passage of health reform legislation threatens to increase this burden significantly.
With generous support from the Searle Freedom Trust, Dr. Chris Conover is undertaking an update of his previous estimates of the benefits and costs of health services regulation. The purpose of this project is to quantify the economic burden of health services regulation for a baseline year (2008). This is worth doing in its own right, but will be especially useful to provide a firm baseline against which to measure any incremental increases in such regulatory costs that arise due to the Obama health plan. Having this baseline and a standardized methodology for estimating it will substantially facilitate later production of estimates of the impact of the new law. Such follow-on estimates could take the form of developing concurrent estimates of the impact of various regulations related to the new law as they are established or in the form of a retrospective assessment of what happened in the first, second or third year of the law etc. Such estimates will help inform the debate over repeal or substantial overhaul of this legislation in the years ahead.