Chairman Van Duyne: “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses”
Subcommittee Chairman Van Duyne's Opening Statement
Washington, July 19, 2023
WASHINGTON, D.C. – Today, the House Committee on Small Business Subcommittee on Oversight, Investigations, and Regulations is holding a hearing titled “Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses.”
Subcommittee Chairman Beth Van Duyne’s opening statement as prepared for delivery:
Good morning, and welcome to today’s hearing on the harmful impacts of overregulation in health care, which is hurting small businesses.
I want to thank our witnesses for joining us today. I am eager to hear from you and discuss how we can cut through some of the red tape.
Unfortunately, burdensome reporting requirements and rising compliance costs, coupled with an overreaching regulatory landscape, have led to small health care providers having to close their doors for good. This is unacceptable.
As we’ve heard time and time again, overregulation can shutter the doors of any small business, but small health care providers are disproportionately impacted.
I’ll never forget meeting with a doctor who used to own her own practice but had to sell her practice due to the ever-growing cost of keeping up with government-imposed red tape.
During the roundtables I’ve hosted with doctors in North Texas, I always make a point of asking them how much time they spend in front of a screen versus face-to-face with their patient. It’s shocking to hear how much time our medical providers have to spend on compliance – time that they would strongly prefer to spend with their patients.
In 2017, a report from the American Hospital Association (AHA) revealed that the massive amount of regulations placed on health care providers cost them $39 billion each year. To put this number in perspective, if you took an average community hospital, with 160 beds, that would be $7.6 million per year spent on compliance.
Moreover, we know that the constantly changing regulatory environment causes issues with proper compliance and harms patient care.
Frustratingly, the regulatory environment has only worsened since the A-H-A’s 2017 report. The Medical Group Management Association’s 2022 Annual Regulatory Burden Report showed that 89% of respondents feel their regulatory burden has increased in the past year.
When regulatory costs reach the point that it is no longer feasible for small, private health care practices to keep their doors open, it leads to one thing: consolidation.
While proponents of consolidation claim that health care mergers decrease cost and improve access to care, the reality is quite different. Far too often, consolidation decreases quality of care, eliminates competition which increases cost, and removes the possibility of physicians owning their own businesses, thereby crushing the American dream.
Small health care providers have, in recent years, been hit from all sides. We know that on top of severe overregulation, the COVID-19 pandemic played a significant role in consolidation as well. More than 22,000 physicians left independent practice to join bigger hospital systems after the onset of the pandemic.
Unfortunately, small providers bear a disproportionate amount of the regulatory burdens and administrative costs that are associated with health care compliance. This leads to rising costs, increased administrative costs, and more consolidation. This leads to the elimination of many small providers.
We cannot continue to allow overregulation to shut the doors of small care providers. I am glad that our committee is focused on finding solutions to provide better and more affordable patient care.
With that, I would now like to yield to our distinguished Ranking Member from Maryland, Mr. Mfume.