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February 1, 2017

What Trump's order to cut federal regulation could mean for health care

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President Trump on Monday signed an executive order intended to reduce federal regulation, which could have significant implications for the health care industry.

The order directs federal agencies to eliminate at least two existing regulations for every new one they adopt. The order states the incremental cost of adding one regulation and cutting two must "be no greater than zero."

The order also directs the Office of Management and Budget to count how much the federal government saves on eliminated regulations. Federal agencies will then be allowed to use those savings toward the cost of any new regulations they adopt.

Trump said the order is aimed at reducing regulation, regulating costs, and making way for innovation. "There will be regulation, there will be control, but it will be normalized control," he said.

Health care implications

The order could affect regulations for the health care industry. According to Modern Healthcare, dozens of regulations annually are imposed on the health care industry, including:

  • Licensing requirements;
  • Payment policy standards;
  • Rules to implement new payment models; and
  • Quality and safety inspections.

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According to STAT News, the order also could significantly affect FDA and its responsibilities under the 21st Century Cures Act, which aims to accelerate the development and regulatory approval of medical innovations. While regulations that relate to internal agency processes are exempt from the order, the directive could affect provisions that aim to improve mental health care and treatment for opioid misuse, Modern Healthcare reports.

Obama signs the 21st Century Cures Act. Here are the law's key details.


American Hospital Association President and CEO Rick Pollack in a statement called the order a "good first step." He said the regulatory burden imposed on hospitals is "substantial and unsustainable," adding, "Reducing the administrative complexity of health care would allow providers to spend more time on patients, not paperwork."

Scott Whitaker, CEO of the Advanced Medical Technology Association, said the organization is still reviewing the order, but has "long maintained that any regulation needs to benefit patients and foster innovation, and the medical technology industry has developed a strong working relationship with key agencies such as [FDA] and [CMS] in support of those principles."

However, Amit Sarang, a regulatory policy advocate at Public Citizen, said the order could negatively affect providers and companies that have made changes to their businesses to comply with or prepare for existing regulations. "We don't know which of these health care regulations that the health care industry has already complied with and sunk costs into are going to have to be repealed in order to allow for [new] regulations," Sarang said.

But Ankur Goel, a health law partner at McDermott Will & Emery, said he does not expect the order to have an immediate effect on the health care industry. Goel said agencies such as FDA and CMS largely issue directives through guidance, which often are not considered rules and therefore might not be subject to the order (Kaplan, STAT News, 1/30; Rubenfire, Modern Healthcare, 1/30; Sword, CQ News, 1/30 [subscription required]; AHA News, 1/30).

12 things CEOs need to know in 2017

12 things CEOs need to know in 2017

The continued growth of the consumer-driven health care market threatens the durability of patient-provider relationships—and, at the same time, the push toward population health management and risk-based payment is greater than ever.

Hospitals and health systems must adopt a two-pronged strategy to respond to these pressures and serve both public payers and the private sector.

At the core of that strategy? A formula of accessible, reliable, and affordable care that wins consumer preferences and drives loyalty over time. Below, we share 12 key insights for senior executives working to create a consumer-focused health system.

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