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Myopic Government Schemes Threaten Eye Care Consumers … and Taxpayers

by Pete Sepp / /

Contact lens wearers, read on while you still have easy access to your supplies.

This post was first written earlier in the week with an entirely different intention – to point out how clumsy state-level regulatory proposals are getting in the way of promising medical technologies and management models that serve customers better and save taxpayers some serious money. But yesterday’s introduction of unnecessary, counterproductive legislation in the U.S. Congress shows that federal lawmakers are not slouches when it comes to spoiling what should be welcome developments. Recently former House Speaker Newt Gingrich, who has long taken an interest in health care policy, sounded the alarm in a USA Today article about state officials’ attempts to slow the introduction of refractive exams. They are conducted by patients via the Internet or mobile apps and verified by professionals for eyeglass and contact lens prescriptions. These are different from eye health exams, which must still be conducted in person by optometrists and ophthalmologists.

Although the procedure is currently allowed in 45 states and available in 33, Gingrich notes that the optometrists lobby is attempting to “confuse the public and legislators by suggesting that patient safety is at risk” from this limited procedure. Their motive: preserve their old-style business models by outlawing the simple procedure, which would otherwise allow more consumers to get corrective vision care more affordably and quickly. Gingrich aptly likens this cynical effort to lobbying for a ban and confiscation of home thermometers on the ridiculous notion that they constitute “a dangerous tool in the hands of untrained people.”

We’ve run into the issue of medical profession protectionism before. In North Carolina, Texas, and Wisconsin, NTU has joined with free-market partners in opposing legislation that would subject dental service organizations (DSOs) to regulatory death by a thousand cuts. DSOs are essentially management firms that run the office end of practices so dentists can focus on providing care to their patients. That doesn’t sit well with more established dentists who fear competition. As a result, they’re pushing state lawmakers to throw DSOs under onerous medical board supervision. The result is higher prices and fewer options for consumers.

Not to be outdone, and amid more pressing matters like the need to reform our tax code or passing a budget that curbs deficit spending, some in Washington perceive a grave health threat from consumers being able to purchase contact lenses with a prescription outside a conventional doctor’s office. Today, as this post was being edited, our staff’s daily review of new bills introduced in Congress turned up legislation introduced by Senator Bill Cassidy (R-LA) and John Boozman (R-AR) with what seemed to be an innocuous title: “A bill to modernize the prescription verification process for contact lenses, to clarify consumer protections regarding false advertising of contact lenses, and for other purposes.”

Hidden behind those words are some troubling possibilities. It turns out that the American Optometric Association and its allies have long had it in for services that allow consumers to fill bona fide contact lens prescriptions online or through mail order. A big reason the free market for these products evolved in the first place was due to one of the most successful pro-consumer actions the often bureaucratic and overreaching Federal Trade Commission (FTC) has ever taken: the so-called “eyeglass rule” of 1978. Last year NTU explored how important the eyeglass rule was – and could be – as guidance for keeping the FTC from straying into heavy-handed regulatory activity. Our Policy Paper analyzing FTC’s future noted:

Some 30 years ago Timothy J. Muris, the FTC’s then-Director of the Consumer Protection Bureau, analyzed a spate of FTC rulemaking proceedings subsequent to the Magnuson-Moss Act, and found that most were withdrawn, made obsolete, or delayed.

Muris compared and contrasted several of these rules, concluding that most failures stemmed from two factors: 1) A lack of clear theory to show how a given practice violated the law and why a government remedy is superior to the market; and 2) A lack of “systematic projectable evidence” that confirms, not just coincides with, the theory.

Muris cited two cogent examples to illustrate his point – proposed rules that would lift states’ restrictions on advertising for eyeglasses and regulations disclosing funeral home pricing. In the former case, the FTC relied on systematic projectable evidence that    states with advertising prescriptions had “significantly higher prices” than those offering consumers more access to information. In the latter, the FTC plowed ahead with requiring price disclosures via telephone and point of sale, relying on “no more than a score of anecdotes” in a funeral industry with (at that point) some 2 million transactions a year.

This action on advertising helped to prompt a wider-scale examination of state restrictions upon the issuance of eyeglass prescriptions, leading to deregulatory moves under the Eyeglass Rule, permitting consumers more latitude to shop for their eyewear needs. Congress extended this type of flexibility through the Fairness to Contact Lens Consumers Act in 2003, which the FTC subsequently implemented through its “Contact Lens Rule” in 2005. AOA, of course, would like to see the Contact Lens Rule curtailed, even as other normally nanny-ish countries like Germany allow their citizens to purchase the items through vending machines (!).

Unfortunately, the legislation introduced by Senator Cassidy and Senator Boozman (an optometrist) could likewise reverse much of the progress made for eyewear consumers over the past several decades. A quick review of the legislation shows that:

  • Eye examiners could more easily block requests from lens retailers to verify patient prescriptions;
  • New bureaucracies at the Department of Health and Human Services would have an expanded role in investigating these products. Adding more federal agencies into the mix for “oversight” of contact lenses is the last thing Americans need; and
  • Startup online or mail-order outlets hoping to compete with established retailers would have more trouble entering a narrower market.

Consumers must worry too about the terrible precedent this approach could set for many other convenient, cost-effective services that have evolved with the Internet, such as pet health products or pharmacy benefit managers that deliver medicines directly to homes.

And it is the threat to patient-centered health services that should worry taxpayers as well.One of the most daunting challenges facing local, state, and federal governments is controlling expenses of their health care programs. Taxpayers are on the hook for trillions of dollars in liabilities surrounding Medicare and Medicaid, while hundreds of billions in escalating future costs are at stake with government employee insurance programs. Taxpayers, for example, pick up more than 70 percent of the premium cost associated with the Federal Employees Health Benefits Program.At the state and local level, the share can be even higher.

If public officials turn back the clock with ill-advised legislation, civilian government, and military contact-lens consumers, faced with more hurdles or fewer service options, will exert a heavier fiscal drain on insurance. And while Medicare and Medicaid do not provide for online lens purchases, the stifled development of new examination and purchasing venues will impact other areas of health care delivery (see: pharmacy benefit managers, above). At the same time, citizens who might be deterred from maintaining their eye care because of more onerous procedures for purchase could eventually suffer health problems that will rack up more Medicare and Medicaid expenses.

As an eyeglass and contact-lens wearer since 1977, this writer well remembers the difference a pro-consumer, pro-taxpayer purchasing environment made in maintaining his eye health. Getting a good exam from a qualified professional is only one step; convenient access to reasonably priced prescription supplies via telephone and later the Internet, has also been key. Upsetting this carefully-crafted balance with bad policy will not only harm taxpayers, it could, ironically, harm patients too.