- - Monday, May 8, 2017

ANALYSIS/OPINION:

The American Revolution had its Benedict Arnold. The Commerce Clause of the U.S. Constitution has its American Optometric Association (AOA) with its war against interstate ocular telemedicine.  Thereby hangs a tale.

The Constitution was born of protectionist trade wars between the states that flourished under the anemic Articles of Confederation.  The Constitutional Convention of 1787 was convened substantially in response to trade barriers each state had erected.   

The Commerce Clause, Article I, section 8, clause 3, was among the brightest of the Constitution’s crown jewels.  Not only does it empower Congress to prohibit state discrimination against interstate commerce.   It also, ex proprio vigore, preempts state laws that saddle such commerce with undue burdens.  Supreme Court Justice Benjamin Cardozo elaborated in Baldwin v. G.A.F. Seelig, Inc. (1935), a decision which invalidated a law protecting in-state milk producers and distributors from interstate competition:

“Economic welfare is always related to health, for there can be no health if men are starving. Let such an exception be admitted, and all that a state will have to do in times of stress and strain is to say that its farmers and merchants and workmen must be protected against competition from without, lest they go upon the poor relief lists, or perish altogether. To give entrance to that excuse would be to invite a speedy end of our national solidarity. The Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several states must sink or swim together, and that, in the long run, prosperity and salvation are in union, and not division.”

The AOA and its state legislative toadies don’t get it. Their current well-financed efforts to strangle internet competition in contact lenses and eyeglasses are indistinguishable from standing athwart economic history yelling, “Stop.”  

Pathfinding technology has given birth to phone apps like Opternative, which gives phone users a 25-minute “eye appointment” with their smartphones; and, GlassesOn, which determines the refractive error of customer’s eyes through the manipulation of light on the phone screen.  Both types of interne evaluations have proven as effective and accurate as traditional eye exams in optometrists’ offices or stores.  They are always more convenient and generally less expensive than a visit to an optometrist.  In rural areas, hours of drive time are commonly saved by an internet eye examination.

The AOA represents approximately 37,000 optometrists.  It has unleashed an army of lobbyists among the 50 states seeking crony capitalist legislation that would outlaw ocular telemedicine.  The sole purpose is to suppress competition to enrich the few who wish to continue dwelling in a medical petrified forest.  No evidence has been unearthed showing that internet eye exams for lenses or eyeglasses are riskier or less accurate than optometrist administered eye exams.  Optometrists are not doctors.

They covet a legal monopoly on eye examinations to force customers through the door, and then sell lenses or eyeglasses to their captive audience for whom they have just written prescriptions at monopolistic prices.  The unscrupulous even refuse to provide their customers copies of their prescriptions to prevent them from shopping elsewhere or online for a better deal.

State law prohibitions on ocular telemedicine are flagrantly unconstitutional under the Commerce Clause.  The following test was announced by Justice Potter Stewart, writing for the Supreme Court in Pike v. Bruce Church, Inc. (1970):  “[W]here the [state] statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.  If a legitimate local purpose is found, then the question becomes one of degree.   And the extent of the burden that will be tolerated will…depend on the nature of the local interest involved, and whether it could be promoted as well with a lesser impact on interstate activities.”

Anti-telemedicine laws to shield optometrists from online competition in the sale of lenses and eyeglasses fail the test of a legitimate local purpose.  The Supreme Court held in H.P. Hood and Sons v. Dummond (1949) that economic protectionism, simpliciter, is an illegitimate objective under the Commerce Clause.  Even if it were, the burden on interstate online sales of lenses and eyeglasses is clearly excessive.  

Online interstate sellers have two commanding advantages over their in-state optometrist rivals:  price and convenience.  Yet their market penetration has been arrested at approximately 20 percent.  That is because anti-telemedicine laws give optometrists a captive customer base by granting them a monopoly on eye exams.  Once the customer walks through the optometrist door, a combination of customer ignorance and convenience enables the sales of lenses and eyeglasses at super-inflated prices.  Eye-exams over the internet would destroy this de facto tying arrangement.  

If the United States Senate is serious about making health care affordable, then it will include in any bill that repeals and replaces President Obama’s Affordable Care Act a prohibition of state or local laws that outlaw telemedicine to protect the horse-and-buggy days of traditional health care.  In matters of economic regulation, we should never forget the insight of renowned economist Joseph Schumpeter:

“The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.”

Creative destruction like telemedicine is the lifeblood of prosperity.  It should be encouraged, not crippled.

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