Three Ways States Can Reduce Healthcare Costs for Businesses and Consumers


Managing health care costs and improving mental health benefits will be top priorities for U.S. employers over the next two years, according to a March 2022 survey of more than 600 companies employing 10 million workers. The result is not surprising: health care costs have been a major expense for employers for many years.

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

The past two years have focused on health care delivery and access. States responded to the pandemic by easing regulations that restricted access to services and providers. These actions probably saved lives. States can and should strengthen policies that expand patient choice, increase competition and spur innovation. By making these changes permanent, they will likely help businesses and individuals save money on their healthcare costs.

First, states should eliminate laws preventing nurse practitioners from working to the fullest extent of their education, training, and certification. Last month, Kansas Governor Laura Kelly, a Democrat, signed legislation passed by the Republican-controlled legislature that allows nurse practitioners to practice independently without the supervision of a doctor. There are now 26 states, including Washington, DC and two US territories, allowing full independent practice authority.

People know nurse practitioners well and often see them when they are sick. It’s also why 81% of registered voters think healthcare providers should be allowed to provide services consistent with all of their education and training. After all, nurse practitioners receive a master’s or doctoral degree and clinical training and provide a wide range of physical and behavioral health care services. Research has shown that nurse practitioners can manage 80-90% of care provided by primary care physicians. This allows physicians to focus on the 10-20% of patients with more complex issues.

Another opportunity to reduce health care costs, including mental health care, is to expand telehealth to all states. States should allow patients to consult doctors of their choice wherever they are physically located. Almost all states require healthcare providers to be licensed 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 have enjoyed the benefits and cost savings of telehealth visits during the COVID-19 pandemic. The survey found that nearly all employers plan 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 work stoppages.

And finally, 38 states restrict much-needed competition in health care services and facilities. These restrictions – called certificates of need (CON) laws – reduce competition and limit access to new technologies, suppliers, facilities and services. Decades of research on CON laws have proven that they increase costs and reduce access but do not increase the quality of services. In a rare action, the federal government repealed its mandate and funding of 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 be specifically aware of CON laws, but they are concerned about their effects. The March survey indicates that 73% of employers cited provider consolidation as a challenge to effectively delivering their healthcare.

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

Greg George is Director of Legislative Affairs at Mackinac Center for Public Policya research and educational institute located in Midland, Michigan.


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