Explainer Episode 45 – Telehealth & COVID-19

In this podcast episode, Michael Cannon, Director of Health Policy Studies at Cato Institute and Marisa Maleck, Partner at King & Spalding LLP join us to discuss telehealth regulation – what it is, what happened to it during COVID-19, and what the opportunities and barriers are for future telehealth innovation.


Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

Introduction:  Welcome to the Regulatory Transparency Project’s Fourth Branch podcast series. All expressions of opinion are those of the speaker.


Chayila Kleist:  Hello, and welcome to the Regulatory Transparency Project’s podcast. My name is Chayila Kleist, and I’m an Assistant Director of the Regulatory Transparency Project. Today, we’re delighted to host a discussion on telehealth regulation, what it is, what happened to it during COVID, and what the future of telehealth may be. As always, please note that all expressions of opinion are those of the experts on today’s program as The Federalist Society takes no position on any particular legal or public policy issues. 


Speaking of experts, today we have with us two members of RTP’s FDA & Health Working Group. In the interest of time, I’ll keep my introductions of our guests brief, but if you’d like to know more about either of our guests today, please feel free to visit regproject.org and read their impressive full bios. 


Firstly, welcome to Michael Cannon, who is the Cato Institute’s Director of Health Policy Studies and a prolific author. His articles have appeared in the Wall Street Journal, the New York Times, USA Today, the Washington Post, the Los Angeles Times, the New York Post, and many more. He’s also co-editor of Replacing Obamacare: The Cato Institute on Health Care Reform, author of 50 Vetoes: How States Can Stop Obama Health Care Law, and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It


Also joining us today as our guest host of this podcast, Miss Marisa Maleck, a partner in the FDA and the Life Sciences practice at King & Spalding LLP. Miss Maleck focuses on litigation, regulatory matters, and public policy with a focus on consumer products and services. In addition, she’s appeared as a guest on MSNBC, MSN, CNBC, and NPR and her written work has appeared in Newsweek, the National Law Journal, the Wall Street Journal, the Washington Post, and Politico. I’ll leave it there and hand it over to our host. Miss Maleck, the mic is yours.


Marisa Maleck:  Thank you so much. I’m very excited to be here. As I had mentioned, my first job ever was at Federalist Society back in 2008, so great to be back. It’s definitely come a long way. These rooms are absolutely beautiful. I wish our listeners could see. But I’m excited and delighted to be here with Michael Cannon. We’re going to be talking about telehealth trends. I’m going to hopefully stop myself from adding gratuitous comments that I’ll later regret, but we’ll see what happens. So, Michael, big first question—what is telehealth?


Michael F. Cannon:  So telehealth is just seeing a doctor or some other clinician in some way aided by technology. It could be over the phone. It could a Zoom call. It could be through specialized software that facilitates the doctor-patient interaction. And this whole issue of when patients and their providers can meet and consult with each other through these media is a really contentious one, and there are a lot of government rules that prevent it from happening. 


And those rules are one of the contributors to one of the biggest frustrations with healthcare in the United States, which is that prices seem to be going up and up and up. And we don’t get in healthcare what we see in other sectors of the economy, which is quality improving while prices are falling. Telehealth has the potential to dramatically reduce healthcare prices for lots and lots of medical services. But there are a lot of government regulations standing in the way and a lot of absurd government regulations and absurd situations that result from those regulations.


Marisa Maleck:  Great. So in talking about what telehealth is, it seems like there’s a couple of different entities maybe involved. Right? You have perhaps platforms that are connecting providers to patients. But you also mentioned apps. And I’m wondering, if by telehealth, you think it is inclusive enough to include like fitness apps or wellness apps or electronic health records or things that aren’t necessarily a platform for connecting people. How are limiting this definition, and are regulations sort of affecting them all?


Michael F. Cannon:  So the same sort of regulations that prevent you from consulting with a clinician in another state—or another country for that matter—are also preventing a lot of other forms of telehealth or information technologies, preventing them from making healthcare better and more affordable and safer for you. And then there’s also some other — and by those regulations, I mean we’re talking about clinician licensing laws that each state enacts and says that if you want to practice medicine—if you want to be a doctor, nurse, dentist, what have you and treat someone in this state—you have to get a license from this state. That seems on the surface to be a sound idea. It is the main inhibitor of the sorts of innovations, quality improvements, and price reductions that telehealth can offer. 


But there are other regulations that stand in the way of apps and other information technology just that could be improving the patient experience. The FDA has asserted some authority over the development of those sorts of apps. And that’s another roadblock the government puts it in the way of better and more affordable healthcare.


Marisa Maleck:  Yeah. I want to push on this point a little bit because this is a really interesting one. You mentioned sort of the clinician restrictions, but you said that there were a lot of other laws as well. And I’m wondering if you can tease out whether or not you think some of them are justifiable barriers, not justifiable barriers. Where do you see federal regulations come in? So I’ll throw out a couple. 


HIPAA, for example, will oftentimes govern, especially if it’s a provider platform that is working with the health plan, right? They would be a covered entity. But oftentimes FTC, the Federal Trade Commission, you see has started to assert itself often, especially with respect to places where HIPAA does not apply. Right? And they’re starting to have a bunch of privacy regulations, security regulations on top of perhaps some of the traditional things that might come to mind, like a licensing regime or actually have the services being performed. Are you drawing any distinctions between the laws? Do you think that they’re all crazy? Where should we be?


Michael F. Cannon:  So where I’d begin is with the idea of patient’s rights and the patient — I think people do have rights when it comes to their healthcare. Their most important right is their right to make their own health decisions, and that includes the right to choose their provider and to contract with those clinicians or that hospital or what have for whatever services the patient chooses. And that means that — and that includes, that right to contract includes the right to determine what happens with the generation — with the information that that interaction with their provider generates—your electronic medical records, your lab results, and so forth. 


I think any law that stands in the way of patients making those decisions for themselves is prima facie illegitimate, and the government should not be imposing those restrictions. I think the clearest example of those laws both standing in the way of patients’ exercising their healthcare rights and just leading to absurd results come when we’re looking at telehealth. And there may be absurd examples elsewhere but take this example. 


There’s a student at Emory University. Her name is Helen Khuri, I believe it is. She’s 19 years old. She required psychiatric treatment for post-traumatic stress disorder. The clinician that she and her family identified as providing the ideal or the best service for her was in Massachusetts. Now, this MD did not have a license from the state of Georgia, where Emory University is and where Helen lives. Now, this doctor was more than happy to see Helen via telemedicine, via Zoom or some other platform. But because he did not have a license in the state of Georgia, that would have been illegal. And, so, what Helen did was she and her father rented a place, an apartment, in Massachusetts for the duration of her treatment so that she could go up there and consult with him, not in person, but via telehealth, via Zoom or some similar platform. 


And this just shows how absurd these state clinician licensing laws are. The stated purpose of these laws is to prevent — is to improve the quality of care, to make sure that the doctors that are practicing medicine are competent. And yet, what they end up doing is not just blocking the incompetent doctors from practicing, but they end up preventing patients from choosing their own clinicians. This country has lots of — there are lots of competent clinicians in other states, but each state’s licensing regime says you cannot consult with them because they don’t have a license in this state. So what those rules are actually doing is blocking access to a lot of high-quality care, in some cases, the highest quality care that’s available, and then they’re leading to these absurd results where some patients have to travel—travel—to another jurisdiction just to use telehealth to consult with those doctors. 


It would be absurd for a state to build a literal wall around the state and say that no one can leave this state in order to consult with a doctor in Massachusetts or New York or California. But each state does create a virtual wall that prevents patients from consulting with topics first in their fields via telehealth. And, like I said, there are going to be other absurdities and other sorts of regulations to create. And those regulations, I think, do inhibit the patients’ rights to choose their providers and to decide what happens with the information that those interactions generate. I’m talking again about privacy rules. But I think that telehealth does provide really the clearest example of just how nuts and illegitimate these regulations are.


Marisa Maleck:  Thank you. So it seems like you’re really kind of focused on consumer choice, consumer being able to decide where they want to be. And there were lots of regulations that were sort of relaxed during COVID, at least by the federal government. Were the laws that you’re talking about, were those passed by the federal government, by the state government, or any of these relaxed? Do you know how the rules were relaxed? Should they be relaxed forever after COVID is over? Is COVID ever going to be over? Take your pick of questions.


Michael F. Cannon:  So the clearest indication we have that these clinician licensing laws are blocking access to quality care for patients—vulnerable patients, patients who have a hard time affording the care that they need—is that when COVID hit and hospitals were experiencing shortages of providers, shortages of clinicians because there were such a massive influx of patients and some of their own staff were out sick because they themselves got COVID and, at the same time, patients needed to keep seeing their doctors, but they were unable to do so in person because of concerns about COVID and in many cases they were unable to — there were other reasons because maybe the doctor was volunteering in another hot spot or was unavailable for some other reason. When this demand shock for healthcare led to supply shocks and shortages, states took these regulations and they said, “Forget it. We are suspending these prohibitions on telehealth with providers, with clinicians in other states. If you’ve got a license from another state, that’s good enough for us.” 


They suspended these restrictions on clinicians with licenses from other states coming into their state and providing medical care. And it wasn’t just the party of limited government, Republicans, who were doing this. If anything, Democrats were better at deregulating clinicians in response to COVID than Republicans were. The Democratic governors in Michigan and New Jersey stand out. So what COVID gave us was this clear bipartisan recognition that clinician licensing laws block access to care and deny patients their right to choose who their provider is. And, so, that’s also the good. It’s wonderful that they did this, that they recognize this, that they suspended those regulations and expanded access to care during a very critical time. 


But, as COVID has waned as a concern, a lot of states have allowed those regulations to snap back into place, usually at the behest of physicians in those states who don’t want competition from physicians and other clinicians outside of their states. And, so, these licensing laws, once again it appears that they exist, not to protect patients from incompetent clinicians, because in fact what they’re doing they’re protecting — they’re denying them the right to see — their right to see competent clinicians in other states. It appears that what these licensing laws are really doing is just protecting instate clinicians from competition, from lower cost and/or higher quality providers elsewhere. 


And, so, if there are any silver linings to the COVID-19 pandemic, that is one of them. And what state policy makers should be doing, rather than letting those regulations snap back into place, they should be saying, “Look, these regulations were never justifiable. When we suspended these regulations, nobody got hurt.” There are no — we’ve looked. We’ve tried to find examples of states relaxing these regulations and then patients being harmed by incompetent providers or low-quality care, and those examples just don’t exist. So we should not be allowing those regulations to take effect again because all we’ll be doing is denying access to care to people. And, so, some states have literalized telemedicine. You mentioned the federal government is doing the same. That’s a bit of a different situation. We can talk about that if you want.


Marisa Maleck:  Yeah. I did want to talk about that. But I want to stick with the states for a second because you really raised a good point, that this is really about protectionism in a lot of cases. And I want to — I was hoping you could tell our listeners a little bit about the fact that even if they are in a different state, it doesn’t mean that the provider is going to be unlicensed. Right? A lot of times—I represent some of the biggest telehealth platforms in the world—my clients thoroughly vet the independent contractors on their platforms. So I’m wondering if you can speak a little bit about the fact that the private market is sort of solving for any vetting concerns.


Michael F. Cannon:  Well, it’s not just the private market—although it is principle the private market—it’s also that every state that has suspended these regulations, these restrictions on clinicians in other states has still insisted that that clinician in another state that you want to see have a license from that state. And, so, we’re not talking about any unlicensed anyone. We’re just talking about eliminating the monopoly that each state asserts over who can — over who will regulate the quality of providers that treat patients in that state. So when a state says that we’ll recognize licenses from other states, what they’re saying is that, yes, we will continue to issue licenses to doctors and nurses and dentists and so forth. But, if Arizona or New Mexico or Montana or Vermont issue a license to a clinician, we will honor that license just like every state honors every other state’s driver’s license. And, so, that’s what’s really at issue here is is each state going to be able to assert that monopoly because it’s that monopoly that does the most damage both to patients’ rights to make their own medical decisions and to their access to care.


Marisa Maleck:  Yeah. That’s kind of what I was thinking along those lines, and I just wanted to make sure it was really clear to everybody that these aren’t just unlicensed people. And, when you’re talking about provider choice, you are talking about licensed providers.


Michael F. Cannon:  Yeah. And I might add, you did also ask about the private sector, and that’s really where the vast majority of quality certification originates. I mean, that’s — we have a — or we had an adjunct scholar at the Cato Institute who passed away just a couple months ago. She was an economist at California State University Northridge named Shirley Svorny. And she did a lot of work detailing all of the things that the private sector does to certify the quality of clinicians. Everything from, “Yes, in order to practice medicine, you first need a license from the government,” but the private sector doesn’t just accept that as good enough. In fact, that’s not good enough. Private sector entities who want to distinguish themselves and additional quality signals beyond a government license who want to protect themselves from medical — from liability for medical malpractice, they offer board certification to physicians in various specialties. 


That is a not a government activity. That is a private sector activity, and it provides a more reliable signal of quality than government licensing does. Medical malpractice liability insures that the doctors that they insure because they are on the hook if that doctor ends up injuring someone through negligence, providing them low quality care that injures them. Hospitals and health plans and other healthcare entities vet the doctors to whom they give admitting privileges and so forth because they worry about liability. There’s all sorts of things. And, of course, competitive pressures and brand recognition all drive the private sector to do far more than government does to regulate the quality of healthcare clinicians to the point where licensing adds little, if anything, to the quality certification that would exist in its absence. 


And, so, what I’ve concluded, what Shirley Svorny concluded, and a lot of other economists have concluded is that healthcare would be better and more affordable and access would be more secure if government got rid of licensing and government licensing of clinicians entirely. Because the private sector already does so much, there’s not much that licensing adds in terms of quality certification, but it does add a lot in terms of cost and suppressing innovation in telehealth and in countless other areas that I could mention.


Marisa Maleck:  Great. So just switching gears a little bit towards the federal government, I know the federal government, they weren’t necessarily as involved in the licensing, but they waived certain requirements. For example, there’s a federal statute called the Ryan Haight Act that says you basically need to have in-person meetings if you want to get certain DEA controlled substances. And I understand that that was waived. There were some Medicare and Medicaid extensions that were extended. Where is the federal government on all this now?


Michael F. Cannon:  So it’s important to distinguish between two areas of activity, two lobbying agendas when it comes to telehealth. One of them is what we’ve been talking about—eliminating government barriers to telehealth. That’s what clinician licensing laws create, and there are probably some other government barriers as well. But, on the other hand, there’s a lot of people who want to, as you say, waive provisions of Medicare and Medicaid to allow for telehealth. 


What’s really happening there is people are asking, not to remove a government barrier to telehealth, but to increase or expand government subsidies for telehealth. It used to be that you could — that Medicare and Medicaid—well, Medicare being the federal health program for the elderly and Medicaid being the joint federal-state health program ostensibly for low-income patients—it used to be that they would not pay for telehealth consultations. And once telehealth became more common, what both the clinicians who were engaging these services and the companies that are providing those platforms have done or companies that are specializing in telehealth have done is they’ve gone to the states, they’ve gone to the federal government and said, “Hey, we want more subsidies. Get rid of these rules that say, ‘You can’t bill Medicare if you’re only providing—only—providing telehealth services.’” 


And that is a very different thing from removing government barriers. Because when you remove government barriers to telehealth, you’re shrinking the size of state governments really. But when you’re asking to — when you’re asking for government subsidies for telehealth, you’re expanding state governments; you’re expanding the federal government. You’re increasing the tax burden that Medicare and Medicaid impose on taxpayers. And that is why I draw a distinction between the two. Because the former will, I think, lead to better and more affordable healthcare, whereas the latter is just going to increase the tax burden that Medicare and Medicaid impose on taxpayers and inhibit the development of telehealth because it’s going to develop according to federal or state rules rather than organically in response to what consumers want.


Marisa Maleck:  So what about the prescribing practices because this has been something that’s sort of plagued the telehealth industry? A company named Cerebral had a bunch of government investigations involving their widespread prescribing practices involving ADHD medicine and other controlled substances. What’s your view on that issue? Should the government, federal government, be regulating that kind of issue? Should they sort of stay out of it? Should this be for the states?


Michael F. Cannon:  So I think one implication of the right to make one’s own health decisions is that it falls to the patient to decide what medications the patient should be taking, and that includes not — and that includes ADHD medications. That includes opioids. I am someone who suffered from horrible debilitating back pain. And, because of the history of addiction in my family, I was very afraid of taking anything more than ibuprofen to deal with the pain. I had used Percocet in the past. It was effective as a painkiller, but it did not — I did not like the — it did not agree with me, shall we say. And yet, it was not until I took some of the leftover Percocet that I had from a knee surgery that my back pain — I was able to get my back pain under control, and my back and the extruded disc were able to heal. 


And the idea that someone the DEA or anywhere else in government should be able to decide whether I should be able to access an opioid that quite literally healed my back is, well, let’s just say it’s antithetical to my idea of patients’ rights. And, so, my answer to your question is that the DEA, first of all, should not be making those decisions for patients. And the problem that that creates — at the same time, neither should the federal government be subsidizing those decisions because that ends up with a lot — when the federal government subsidizes consumption of these — of medications such as ADHD medications and others that — you are creating the conditions where physicians will overprescribe these medications. 


So my answer to this issue or this concern about telehealth and some telehealth providers prescribing what maybe the DEA thinks are excessive quantities of these drugs is that, first of all, that’s none of the DEA’s business. And, secondly, if you are concerned about that phenomenon, then if the federal government cares about that, then what the federal government should be doing is eliminating subsidies that encourage overprescribing, not just of these medications, but of others that we could mention. And that would do — that would both curb those excessive prescription and consumption of these drugs and do so in a way that is consistent with patients’ rights.


Marisa Maleck:  Got it. So I think we have time for one more question. So broad question, what’s kind of next for the healthcare industry with respect to telehealth? Where do you hope it goes?


Michael F. Cannon:  So there has been a movement at the state level to reform what we call occupational licensing laws—clinician licensing is one from of occupational licensing—because there’s a broad and growing recognition that these laws reduce access, not just to medical care, but to all sorts of services and interfere with patients’ and consumers’ rights to contract with the producers they prefer and that these laws also interfere with the right to work and increase prices and so forth. And, so, what has been happening at the state level is that more and more states are saying, “We’re going to recognize the occupational licenses that other states issue.” I think there have been more than a dozen, maybe two dozen states that have enacted laws along these lines. But they don’t — they come with various restrictions, and then you don’t always include healthcare clinicians, medical professionals. 


And they should include medical professionals because blocking someone’s access to the provider they need is a different thing and I think a more serious thing than blocking their access to the electrician or the hairdresser that they prefer. And the harms of infringing on patient rights I think are even greater than the harms that occupational licensing imposes in other areas. We’ve talked about some of those, but those harms stretch all the way to these laws. And the monopolistic nature of clinician licensing laws inhibit all sorts of innovative forms of healthcare delivery that do things like coordinate care so that a team of healthcare provider who’s talked to each other about the care they’re providing to a shared patient. 


Electronic medical records, Marcus developed those decades ago, but most Americans still don’t have at least functional electronic medical records because clinician licensing has inhibited the sorts of health systems that have developed them. These and lots of other innovations we could be getting but are not because states have not — because clinician licensing laws have inhibited them.


Marisa Maleck:  Great. Thank you so much for your time today, learned a ton. Hope our listeners did too.


Chayila Kleist:  Indeed. Thank you both for being with us today and for sharing your expertise and your insight. For our listeners, thank you for tuning in and, if you’d like to find more content like this, feel free to check us out at regproject.org. Again, thank you all so much. You have a great day. 




Conclusion:  On behalf of The Federalist Society’s Regulatory Transparency Project, thanks for tuning in to the Fourth Branch podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcasts, Google Play, and Spreaker. For the latest from RTP, please visit our website at www.regproject.org.




This has been a FedSoc audio production.

Michael F. Cannon

Director of Health Policy Studies

Cato Institute

Marisa Maleck


King & Spalding LLP

FDA & Health

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].

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