A Cure Worse Than the Disease

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Ending surprise medical bills has become a major, bipartisan issue in the public discussion over health care policy. Earlier this year, the Trump administration set finding a solution to surprise billing a top priority as the president and his cabinet examine comprehensive proposals to push back on rising health care costs. What’s more, Members of Congress from across the political spectrum have introduced myriad proposals aimed at reforming health care practices that send patients home from the hospital with surprise medical bills.

With the 2020 Election season in full swing, the health care policy discussion has been dominated by wide-ranging, mostly left-center proposals like Medicare-for-All and government-mandated prices for prescription medicines and hospital rates. Government price controls and single-payer health care are in vogue – some examples: Senator Bernie Sanders’ (D-Vt.) single-payer, government-run approach; Senator Kamala Harris’ (D-Calif.) call to eliminate private insurance plans; and Senator Bill Cassidy’s (R-La.) proposed legislation to solve the surprise billing problem with government-set rates.

Democratic Party presidential hopefuls favoring greater government control over health care is not a revelation. In fact, the debate on the Democratic side is refreshingly honest. To illustrate we just have to look at Senator Sanders’ full-on support for socialized medicine versus Senator Elizabeth Warren refusing to support a single-payer plan that would eliminate private health insurance. The Democrats are debating ideas on how to tame health care costs – albeit from a government-centric point of view.

The surprise here is on the center-right where a conservative, free-market Republican from Louisiana is pushing for government-set prices. Senator Cassidy’s proposal – while well intentioned – is an all-roads-lead-to-single-payer solution that will not solve the problem of surprise billing. Congress must not lose sight of the fact that surprise medical bills are just a symptom. While no amount of rate-setting will remedy the network problem, the Senator’s proposal is a cure worse than the disease.  

The question is not whether the Senator’s bill to allow for government-mandated pricing will lead us toward single-payer and the elimination of private insurance – it’s a question of how fast his proposal, if enacted, will take us there. 

The failure of the Affordable Care Act was, in part, due to its one-size-fits-all approach of putting the government at the center of payment negotiations between providers and insurance companies. We know the results – increased premiums and deductibles and the increased frequency of surprise medical bills.

The new federal rules and government interference – i.e., blanket rate setting – in the Cassidy offering is a policy concoction that will destroy the flexibility and leverage provider networks need to negotiate the best rates for patients.

Senator Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not to his own facts.”  The fact is that governments never negotiate, governments mandate. The Cassidy legislation is government-mandated price controls that will abolish competition, stifle innovation, and harm American competitiveness and investment.

Not only does the rate-setting idea not work, but it could end up being a poison pill that prevents Congress from passing a surprise billing solution.

A recent article on the challenges facing states looking to curb surprise billing reported that State insurance regulators said there are major hurdles to implementing proposals involving rate setting and payment caps as solutions to surprise patient bills: namely, people balk when legislators start setting rates.  

Jane Beyer, senior health policy adviser for the Washington Office of the Insurance Commissioner, likened it to the “camel’s nose under the tent” at an event hosted by Brookings on the issue last week: something that would pave the way for politicians to get their hands into other healthcare finance issues. “Anything that has a state legislature setting rates is automatically very controversial and volatile,” Beyer said. 

The bipartisan support in Congress for finding a solution to the surprise billing issue offers a rare opportunity to actually achieve healthcare reforms that will positively impact patients, this opportunity shouldn’t be squandered on destined to fail proposals like government-set rates.  

Senator Cassidy should heed the insurance regulator’s warning and go back to the policy drawing board to find a more effective solution that treats the cause of surprise bills, not just the symptom. The Senator has veered off this free-market track with his current proposal of Medicare-for-All-style price controls that will force innovators to accept lower prices in a take-it-or-leave-it proposition. Obamacare proves that such an approach will result in reduced access and higher prices.

The Cassidy proposal will make health care more expensive. American patients need relief, not Obamacare 2.0.

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