Congress may be preparing to fill the Christmas stockings of health care providers with a lump of coal. Despite the heavy toll the pandemic has taken on doctors, nurses, and hospitals, lawmakers are considering compounding 2020’s misery by imposing price controls as part of its solution to “surprise medical bills.”
Patients can get surprise bills after being taken to and treated in an emergency at hospitals outside their health plan’s networks, or when they go to hospitals that their insurers claim are in-network only to learn later that one or more specialists on their care team were not.
When Americans spoke out in increasing numbers to demand a solution to surprise medical bills, they did not want Congress to inflict further pain on a struggling health industry. But that is what may be about to happen.
As the lame duck Congress considers “must-pass” bills to keep the government funded, there is a danger it may include contentious provisions like rate-setting, a form of price control that has been repeatedly advanced by insurer-friendly legislators but so far keeps getting rejected. Unfortunately, it only must succeed once to do lasting damage to patients and health care providers.
The imposition of a government-derived price for contested services should continue to be rejected every time it is brought up because price controls have failed every time that they have been tried. The distortions price controls introduce lead inevitably to shortages and quality deterioration. And the cost of failure when it comes to health care is particularly high—often measured in terms of lives lost.
Unfortunately, the idea has heavy backing from insurers due to the inordinate leverage it would provide them in negotiations. Since the government would derive its price based on nearby median in-network rates or other similar formula, insurers would be able to game the system by strategically and unilaterally narrowing their networks, already a growing health care related problem.
Moreover, government rate-setting wouldn’t just impact hospitals. It would put even more financial pressure on independent practices that are already disappearing at alarming rate thanks to the high administrative burdens and other financial incentives toward consolidation in Obamacare. These practices have long provided the backbone of our nation’s health care system by delivering a high volume of care at lower costs.
With word that Speaker of the House Nancy Pelosi may be sending to the Senate a solution that includes price controls, six Republican Senators (Marsha Blackburn, Rand Paul, Ron Johnson, Mike Lee, and Roger Wicker) wrote a letter to Senate leadership warning that, “Any surprise medical billing legislation that includes rate setting or artificial limits that act as rate setting should not be included in any spending or legislative package before the end of the 116th Congress.”
This is good advice. Surprise medical bills are a complicated problem that requires careful balancing of numerous trade-offs. The strain added to our health care system by a global pandemic only raises the stakes.
For the best chance at finding an ideal solution to surprise medical bill, the issue should be addressed on its own instead of packaged into a “must-pass” government funding bill, where there will be no time for debate or amendments, or otherwise used as a trading piece for unrelated policies. And once Congress is prepared to do that, it should also remember that government price controls never work.
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Image credit: U.S. Air Force photo by Airman 1st Class Cameron Otte | Public Domain.
