Seeing Double Regulation


When asked to name the most controversial medical issues of the day, few people would pick eye care. However, in the past half-century, eye care has played a surprisingly important role in the battle for economic liberty. Now it is at the center of a brewing legislative battle.

It is the familiar story of a profession trying to get government to clamp down on its competitors. In this case, it’s ophthalmologists going after other providers of eye care, such as optometrists and opticians.

The tool they are using is a proposed bill, theHealthcare Truth and Transparency Act of 2011(H.R. 451), to address the alleged problem that some health care professionals are confusing patients with misleading statements. In a press release, the American Academy of Ophthalmology (AAO) says the bill would “make it unlawful for any health care professional to make deceptive statements or engage in any act that misleads patients whether in person, in advertisements or marketing efforts as to one’s education, training, degree, licensure or clinical experience.”

On the surface, that seems harmless and reasonable enough. Yet a slightly closer examination of the proposal shows that it is unnecessary, supersedes existing state laws and regulations and is based on the assumption that consumers are too stupid to figure out the differences between licensed eye care providers.

The bill would mandate disclosure of qualifications from eye care givers in all of their advertising materials and give oversight authority to federal regulators. This might create the impression that the market for eye care is an unregulated free-for-all, with consumers at the mercy of unscrupulous quacks.

In reality, the federal government already has the power to address false or misleading advertising under Section 5 of the Federal Trade Commission Act. Furthermore, every single state has a thorough licensing and regulatory scheme regarding what services each brand of health care provider may provide and rules regarding honesty in advertising and disclosure of health care provider qualifications.

Optometrists, the apparent target of the ophthalmologist-backed bill, are licensed to examine, diagnose and, in some states, treat eye diseases as well as other conditions that may affect the eye. An ophthalmologist is a medical doctor who, after completing a four-year medical degree, then completes a yearlong internship followed by at least three years of residency. Ophthalmologists are licensed to treat and diagnose the full range of eye health issues.

Therefore, a federal bill requiring disclosure is redundant and unnecessary. One likely result of these regulatory redundancies would be an increase in operating costs for small eye care clinics, which would have to keep an eye on new federal health care advertising rules in addition to existing state and local statutes regarding advertising and licensing. If they run afoul of the new regulations, they might find themselves going up against the Federal Trade Commission (FTC). These increased compliance costs lead to higher prices for consumers.

A classic 1972 study showed a direct correlation between restrictive advertising regulations and increased costs of eyeglasses. University of Chicago economist Lee Benham conducted a study of how advertising restrictions on eyeglasses resulted in decreased competition and increased prices. Mr. Benham found that eyeglasses cost 20 percent less in states that didn’t restrict the advertising of eyeglasses.

There’s also the problem of free-speech rights. Generally, government can restrict honest speech only if there is a serious problem and only if the government restriction is as narrow as possible. In this case, ophthalmologists claim that the bill’s mandatory disclosure provisions are needed for consumers to be fully informed. But if the information at issue is that important, why don’t ophthalmologists tout these facts in their own ads? If the ophthalmologists think the distinction between their degrees and optometry degrees need to be publicized, they can do the publicizing themselves. After all, that’s how it works in other areas. Consider kosher foods: Hebrew National actively proclaims the kosher status of its hot dogs; it doesn’t seek federal laws mandating that Hormel and Smithfield state that their own hot dogs are non-kosher.

One provision of the bill would require the FTC to study the extent of misrepresentation in advertising by health care professionals. But if the size of this alleged problem needs to be studied, why is Congress considering legislation aimed at solving it before the study is even started? That doesn’t make sense – unless, that is, you’re a lobbyist in a rush to make your client happy.

Proposals like this are simply attempts to protect the profits of one business at the expense of another – in this case, optometrists. In recent years, as health care costs have increased, many patients increasingly rely on more affordable optometrists, who, in turn, have accommodated those patients by increasing their list of services. In two states, optometrists can now perform laser eye surgery. This has led to a turf war over patients’ health care dollars.

This proposed legislation would undermine states’ prerogative to license and regulate health care professionals, increase the costs for small optometric businesses and the cost of eye care for consumers and do nothing to protect or enlighten consumers. Astonishingly, its sponsors include several Republican lawmakers who, on other occasions, have championed the benefits of economic freedom. This is an anti-business, anti-consumer bill. Any lawmaker who purports to defend free markets and individual choice should oppose it.