A New Paper By Doug Badger & Brian Blase |
Surprise medical bills are a source of frustration for many Americans, and legislation to address the problem appeared to be on a fast track early in the year. But action has since slowed, primarily due to a stand-off between the two powerful interest groups that often benefit from surprise medical bills: providers and insurers. Complicating this political calculus, Congress has its own interests in seeing this as a “pay for” to extend other unrelated health programs.
One plan Congress is considering would extend federal rate-setting schemes—a practice that is at the heart of proposals to move toward a single-payer system—to private physicians and health programs. Another would enact an arbitration model, which has a host of problems including imposing contractual terms on parties that have not entered into a contract.
If Congress makes rate-setting the solution to surprise bills, which consumers rightly resent, it may be difficult to explain why it shouldn’t adopt the same approach to medical bills that aren’t surprises, which consumers also often find unpleasant.
Congress should adopt a more thoughtful, targeted approach to the problem. This paper offers solutions to protect patients from surprise bills primarily by preventing insurers and providers from giving false and misleading information to consumers and by requiring that patients receive a good faith price estimate in advance of receiving scheduled care.
Truth-in-advertising protections combined with a good faith estimate requirement leaves one scenario in which patients need protection from surprise medical bills—emergency services at out-of-network facilities. Patients should be protected from balance billing in this situation, and Congress should apply existing federal regulations to determine the rate that insurers compensate providers in this narrowly-defined instance.
Many consumers want greater transparency in health care. Equipping them with timely and accurate information about medical prices would help reverse the sclerotic effect of price opacity. It would create room for price competition that could lead to the redesign of insurance products. And it would redirect the efforts of government, one of the leading causes of wasteful and inefficient medical spending, toward enabling a consumer-centered marketplace that curbs health care costs through choice and competition.
Hospitals and insurers will howl, but the Trump administration today took a big step toward consumer empowerment with administrative actions designed to increase price transparency for hospital and other medical charges.
Galen Senior Fellow Brian Blase, who was instrumental in developing the executive order on price transparency issued in June, congratulated the administration for its proposed and final rules today. “Transparent prices, particularly linked with incentives for consumers to search for value, will put downward pressure on health care costs and should reduce inefficient spending.”
To the Editor:
Re “Four Key Things You Should Know About Health Care” (Op-Ed, nytimes.com, Sept. 12):
Ezekiel J. Emanuel and Victor R. Fuchs argue that price transparency won’t lower health care costs. Fortunately, they’re wrong, largely because they missed several avenues for how transparency will help.
Transparency should lower prices through four critical paths: better informed patients; better informed employers able to help their workers shop for value; improved ability for employers to discipline middlemen; and public pressure on high-cost providers.
Employers — actually, employees, since all the health care spending comes out of their wages — are paying rates far above hospitals’ marginal costs for providing services.
Drug importation is no longer a pipe dream. Now it’s a pipe bomb.
The Department of Health and Human Services (HHS) recently floated a proposal, dubbed the Safe Importation Action Plan, to allow Americans to use Canada as their personal pharmacy. In Canada, the government dictates the market through price controls, but any drug importation scheme should give Americans pause.
Remember, the Food and Drug Administration (FDA) has stated over and over again that our government cannot vouch for the safety and efficacy of Canadian medicines. Pushing this policy through would needlessly threaten patient health and well-being. And here’s a key fact that’s being ignored: It’s infeasible. Canada simply doesn’t have enough drugs to share with United States.
The so-called Safe Importation Action Plan offers two paths forward for drug importation. First, states, wholesalers or pharmacists could submit plans for demonstration projects for HHS to review outlining how they would import Health Canada-approved drugs, Second, manufacturers could import versions of existing FDA-approved drugs into the United States.
Surprise out-of-network billing and related patients’ costs are increasing among inpatient admissions and emergency department visits to in-network hospitals, according to a study published in JAMA Internal Medicine. Stanford University researchers found that from 2010 through 2016, 39% of 13.6 million trips to the ED at an in-network hospital by privately insured patients resulted in an out-of-network bill. That figure increased during the study period from about a third of ED visits nationwide in 2010 to 42.8% in 2016. [This shows the ineffectiveness of patchwork legislative solutions since Obamacare contained provisions to stop surprise bills when it passed in 2010.]
As advocates of free markets and members of the business community, we can debate which proposals to prevent surprise billing are more appropriate, but if we enshrine current rates with an arbitration scheme, or if we fail to advance solutions on surprise billing, we only play into the hands of single-payer advocates. It’s time to end secret pricing and save our health care market from the corrupt practice of surprise billing once and for all.
Last year, the Trump rule on short-term health plans went into effect, which not only allowed plans to last 364 days, it lets people renew them for up to 36 months. “Sabotage!” the health care experts cried. They said this new rule would allow junk insurance that would rip consumers off and would force Obamacare premiums through the roof. But the results so far strongly suggest that the “experts” had it exactly wrong when they predicted doom and gloom by giving consumers more choice. States that opened their markets up to new choices and more competition are seeing smaller rate hikes than those that decided to “protect” their consumers by forcing them into government-mandated Obamacare plans.
Health insurance enrollment has declined among people who do not qualify for financial help under Obamacare, new federal data show. The data released by the Centers for Medicare and Medicaid Services on Monday show that enrollment declined by 1.2 million people, or 24%, between 2017 and 2018 among people with incomes too high to qualify for Obamacare subsidies and who therefore face the full brunt of premium cost increases. In contrast, in the same period, enrollment ticked up among those with subsidized coverage by 300,000 people.
Obamacare wasn’t supposed to give free health insurance to everybody. The Affordable Care Act’s authors expected the poor would enroll in Medicaid, while those with higher incomes would buy coverage through the new insurance exchanges, with subsidies that decrease as income rises. It isn’t working that way. A study published this week by the National Bureau of Economic Research shows that ObamaCare has turned out to be a giant welfare program, with millions of working- and middle-class Americans improperly receiving Medicaid—a reflection of the unpopularity of the exchange policies and incompetence of government oversight.
The 2019 Milliman Medical Index, which measures healthcare costs for individuals and families receiving coverage from an employer-sponsored preferred provider plan, found that health care costs have reached $28,386 for a family, an increase of 3.8% from the year prior. Health care costs for the average American adult are at $6,348. Milliman looks at five components of health care costs, including inpatient and outpatient care, pharmacy, professional, and other services.