The Overton Window Is Now Wide Open for Much-Needed Reforms

The reforms that have been critical in the COVID-19 pandemic are also the right medicine during good times

By Adam Thierer and Andrea O'Sullivan

As the coronavirus pandemic has intensified, government officials domestically and abroad have started reconsidering the wisdom of certain laws and regulations that might hinder innovative responses to the crisis. In other words, the Overton Window has blown wide open on a number of fronts, and it offers us the chance to achieve much-needed regulatory reforms.

The Overton Window refers to those policies that the public, and therefore policymakers, will support at any given time. At this moment, multiple Overton Windows are opening as the crisis necessitates fresh thinking about long-standing laws and regulations that may be thwarting much-needed responses to the pandemic. Indeed, our country’s immediate needs for healthcare supply and innovation have elicited support for deregulatory efforts from some unexpected parties. The interesting questions now are: how long will those windows remain open, and how much has the crisis shifted the debate over various regulatory restrictions?

Rule departures and partial deregulation

The policy response to the growing pandemic increasingly involves a series of “rule departures” from standard operating procedures. Political scientists use the term rule departure to describe a refusal by public officials to enforce existing laws and regulations for various reasons. Rule departures often take the form of formal waivers to rules and other legal requirements. Rule departure also occurs informally when policymakers simply ignore activities that may be in violation of existing law. In either case, rule departure is tantamount to partial or temporary deregulation.

What is interesting about rule departures is that they signal an acknowledgement by policymakers that certain laws or regulations stand in the way of progress. Such rule departures and partial deregulation offer a chance to reconsider the wisdom of certain regulatory policies and determine if they continue to make sense going forward, after the crisis has abated. This can result in a rapid, long-term shift of the Overton Window on some issues.

Consider a few examples of rule departures that have already occurred just over the past two weeks.

Health and safety regulations

After the severity of the pandemic became fully clear, many health and safety regulations imposed by agencies like the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS) were logically among the first to be shed. Since these rules directly prevent or limit many novel applications of testing, treatment, and technology, they are the most obvious immediate barriers to the rapid innovation and flexibility that this crisis demands.

The FDA announced many reforms to meet the crisis. Perhaps most significantly, the agency announced a relaxation of the strict testing rules that created a national bottleneck in determining who was infected with the virus. At first, the agency required that all tests (which were initially botched to begin with) be sent to the Centers for Disease Control and Prevention (CDC) for analysis. This process potentially added several days to the time it took to get test results, after shipping and the bottleneck were taken into account.

Compare this experience to that of South Korea, whose early and massive testing regime has been credited with that country’s relatively flat infection curve and rapid recovery time. The United States unfortunately missed that opportunity due to stifling testing rules, but the FDA did eventually change course and allow state and local laboratories to develop and run their own tests.

Unfortunately, the FDA’s testing regulations still have room for improvement. Its most recent Emergency Use Authorization guidelines, which regulate how private labs can process tests, explicitly bar the use of at-home testing. Many public health experts believe such tests can greatly improve our health surveillance and contact tracing capabilities while limiting the risk of infection—since people who suspect they are sick can test themselves at home.

The FDA’s ban on at-home testing has led some early-to-market test companies and labs to destroy samples that have already been collected and potentially could have safely and accurately provided valuable health information to patients.

Even something as simple as the humble hand sanitizer was stymied by unneeded regulations whose cost only became clearer during the pandemic. In response to the shortage of hand sanitizers, the FDA said it would not take regulatory action against firms or pharmacists that made their own. Many people were probably surprised to find out that previously it was a crime to manufacture something as simple as making a mix of alcohol and glycerol or aloe vera gel.

Meanwhile, the Transportation Security Administration announced that it was waiving the four ounce limit on liquids and gels for hand sanitizers on airplanes. Critics pointed out that the rule change called into question the wisdom of the agency’s 14-year ban on such small amounts of liquids. If larger amounts of hand sanitizer is safe to bring on planes, why not other liquids, too?

Licensing and scope of practice

Regulations on healthcare providers similarly proved too burdensome for the demands of a highly infectious disease outbreak.

Many people are surprised to learn that many states promulgate rules that purposefully limit the number of hospital beds or facilities that can exist within a region. These are called certificate-of-need (CON) laws, and they mandate that healthcare providers stand before a regulatory board and “prove” that the hospital facility expansions they desire are “necessary” for a community.

As Mercatus Center research has demonstrated, CON laws limit healthcare supply, which raises prices when we are not in a crisis. But when we need as many hospital beds and healthcare workers as possible to treat an exponentially spreading novel disease, CON laws can become deadly.

Thankfully, many states realized the absurdity of limiting healthcare supply during the coronavirus pandemic and quickly moved to repeal or reform CON laws. North Carolina eliminated its rules that hospitals must get permission before adding more hospital beds. Maryland stripped down its CON laws to fast-track the construction of a new hospital floor to treat COVID-19 patients. And Michigan issued emergency certificates of need to institutions that would normally be mired in months of bureaucratic approval.

Meanwhile, the federal government and states have also moved to give health care practitioners more flexibility in how they are able to treat patients.

Many states have opted to relax licensing rules that normally limit what certain kinds of doctors and nurses are able to do. Virginia issued temporary license waivers for healthcare workers that expand their scope of practice. Massachusetts started issuing temporary licenses to healthcare workers in as little as a day; Texas, South Carolina, and Maryland followed suit.

There is also the opportunity for states to allow practitioners licensed in one state to automatically be able to practice in another. This is called license reciprocity, and it is one promising option to quickly boost the supply of health professionals in a given area on short notice.

Vice President Mike Pence made headlines when he announced that HHS would be working to implement license reciprocity across the states. There has since been some confusion about whether and how the agency would implement this rule, but the fact that it has been ordered by the White House is a harbinger of the quickly changing zeitgeist.

What to do when the crisis passes

While various Overton Windows have opened up in the wake of this crisis, it remains unclear what will happen once the virus subsides. How and when will rules be put back in place, if they are at all? Will political leaders take this opportunity to assess whether the rules eliminated actually serve a legitimate need?

We hope so. Federal and state lawmakers should use this opportunity to commission a comprehensive study of all the rule revisions undertaken during the pandemic and then authorize the body to formulate a set of recommended permanent sunsets or other reforms.

Lawmakers could tap the Base Realignment and Closure (BRAC) Commission model if they wish to overcome political impediments to reform. After the Cold War ended, congressional lawmakers realized that the United States would not need as many military bases as they previously did. Few members of Congress wanted to vote for closing a base in their own district, however, even if it no longer served much of a need. If regular politics had prevailed, closing unneeded bases would have taken many years, and many might never have been closed.

The ingenious solution to this problem was the BRAC Commission, which created an independent board of experts to study existing bases to determine which were objectively needed and which could be closed down. This not only made the base closure process evidence-based, it also removed any political backlash against congressional leaders representing districts with bases since they could truthfully tell their constituents that the decision was out of their hands.

States can adopt a BRAC-like approach to reform of occupational licensing laws, as Mercatus senior research fellow Matthew Mitchell has pointed out. An impartial commission can review a state’s existing licensing laws to determine which ones can be safely discarded. This not only imbues the process with objectivity, it shelters elected politicians from special interest pressure since they will have no influence in the process.

More far-reaching reforms might also be possible. The pandemic is leading some to advocate broader freedoms for those suffering from various illnesses or ailments. Accordingly, other reforms could include: Expanded compassionate use exceptions for those seeking experimental treatments or therapies; enhanced “right to try” rules allowing patients more care options; and the creation of so-called “right to tinker” laws, which would grant the public more freedom to experiment with devices like the DIY ventilators and homemade masks that some enterprising makers have created in response to national shortages.

It is encouraging that governments have moved to clear away the regulatory thickets that had previously choked healthcare innovation and access. This freed-up capital and labor will hopefully provide desperately needed help to the patients and healthcare workers battling COVID-19. The reforms that are critical in a pandemic are also the right medicine during good times. After the crisis passes, policymakers should build on their regulatory successes to extend reforms that will strengthen our healthcare system into the future.