As health care costs under ObamaCare continue to be an important issue for working families, politicians are offering up legislation to address the issue. As is usually the case with these politically-charged topics, many of the ideas may sound positive but actually would make the problem worse.
Almost everyone has seen or experienced unfortunate cases of a patient being hit with large medical bills, perhaps from the news, relatives or friends, or a more direct personal experience. You or someone in your family goes to the emergency room, where necessary or highly recommended tests are done, treatment is administered and, in some cases, surgical procedures performed. Days or weeks later, perhaps just as you begin your road to recovery, the medical bill arrives and surprise total costs of care makes you ill all over again.
This scenario, dubbed “surprise medical billing,” is garnering more attention from policymakers and analysts. And while we have come to expect simplistic, well-intentioned, but fatally flawed proposals from those on the political left on health care, now even some Republicans are following the path of cumbersome and counterproductive regulations that are destined to fall short of being actual solutions.
U.S. Senate Health Committee Chairman Lamar Alexander (R-Tenn.) recently teamed up with Sen. Patty Murray (D-Wash.) to offer legislation that, in part, seeks to address surprise billing. But while “doing something” often sounds attractive to politicians eager to pass legislation, history shows that they often pay no mind to unintended consequences.
The Murray-Alexander proposal would force all health care providers at hospitals to be considered in-network. This may sound good in theory, but it stands to cause a series of negative reactions in the health care industry among hospitals and doctors, ultimately affecting patient access to care.
Regulating costs in this manner can be dressed up, but the fact is that this mandate constitutes a government-imposed control on prices. And as any sane economist can point out, government price controls simply do not work — they never have.
The Murray-Alexander bill bans the ability of a doctor to bill for their services to out-of-network patients, but there would still need to be a system to pay doctors. The legislation does so by price-fixing at a formula using the “median in-network rate.” This is the average in-network reimbursement in a particular geographical zone from that provider.
With prices for out-of-network reimbursement set by law, in-network plans would have no incentive to renew contracts with a negotiated price above that out-of-network price (by definition, half of the negotiated contracts would be above the median in-network rate). The median would go down every year as the higher reimbursed contracts are canceled or not renewed, driving an even lower benchmark.
But as reimbursements for doctors go crashing down, so would patient access to those same doctors, and thus the care that they need. Millions of ordinary people will be negatively affected by the lack of access, and especially people in underserved communities.
None of this touches the insurance companies, of course. The same folks who lined their pockets with billions of dollars, thanks to ObamaCare, again will be the beneficiaries of a huge windfall from this massive gift from politicians in Washington.
Perhaps most tragically, as the broader “Medicare for All” proposal mostly associated with avowed socialist Sen. Bernie Sanders (I-Vt.) appears to gain favor among his fellow politicians on the left, the government intervention mandated by Sens. Murray and Alexander will move the country one step closer to such a system.
The tragedy coming from Sen. Alexander and other Republicans who are playing a key role in undermining a system that still leads the world in multiple areas, including innovation, will be felt by American patients who will start to understand the predicaments that patients in government-run systems around the world feel when it comes to access and quality of care.
This should alarm everyone who cares about real solutions to health care issues — policies that put patients in charge and have transparency and market-oriented principles at their core.
Mario H. Lopez is president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity and prosperity for all Americans. He writes about the intersection of free-market issues and matters that have significant impact on Hispanic and/or underserved communities. Follow him on Twitter @MarioHLopez.