Supporters say bill could bring down costs as ‘consumers’ shop around but experts say comparison shopping is unrealistic
A bipartisan healthcare reform bill passed by the House could make it easier for Americans to find out the cost of a doctor’s appointment or procedure before a patient receives it – a task that currently ranges in difficulty from Herculean to impossible.
The bill would require hospitals, diagnostic laboratories, imaging services, surgical centers and pharmacy benefit managers to publicly post prices. That, supporters said, could bring down the cost of healthcare as “consumers” shop around.
“We all know that healthcare is too expensive, and the system is far too complicated,” House energy and commerce committee chair Cathy McMorris Rodgers, Republican of Washington state, said Monday at a floor vote in the House. The bill passed 320-71. The new bill “lowers costs for Americans through increased healthcare price transparency”, McMorris Rodgers said.
But even as transparency has many fans, including consumer advocates, few outside of the Republican party have cast the bill as a silver bullet to bring Americans affordable healthcare.
The bill “is a tremendous step forward”, said Patricia Kelmar, healthcare campaign director for US Public Interest Research Group, a consumer advocacy organization that lobbied in favor of the bill.
“It’s such basic information consumers just deserve to know,” Kelmar said, adding that at the same time, “there’s no one solution to the high cost or price for healthcare.”
Healthcare has gobbled up a growing share of gross domestic product since the mid-20th century, rising from 5% of GDP in 1960 to more than 18% in 2022. Today, the US spends more than $12,000 per person on average for healthcare.
Individuals have increasingly borne the brunt of these sky-high health prices in the last decade, thanks in part to a philosophy that has dominated health reform political discourse since the turn of the millennium.
The ideology, often promoted by Republicans, emphasizes patients are “consumers”, promotes the necessity for “personal responsibility” and requires people to have “skin in the game” (read: money).
With this ideology in mind, Republicans helped popularize the “consumer driven” health plan when by creating a tax-exempt savings plan attached to health insurance with very high deductibles.
Now commonly called high deductible health plans, patients are required to spend thousands of dollars before insurers start paying the bills, as much as $9,050 per year for individual plans.
In the last decade, large employers have found these plans especially attractive, even as they are blamed for casting patients into medical debt. The overall market for high deductible health plans grew from just 4% of employer-sponsored health insurance in 2005 to 28% in 2022. About two-thirds of Americans who work for big companies (more than 1,000 employees) now have a high deductible health plan.
When Democrats passed the Affordable Care Act in 2010, it largely left these plans untouched. At the time, the most prescient issue in health reform was seen as providing insurance to millions who had no way to obtain it. In a way, those reforms succeeded – the rate of people without health insurance in the US has never been lower, and currently hovers around 8%, or 26 million people.
But the rate of people who are under-insured, or who cannot afford to use the insurance they have, has grown steadily with the popularity of high deductible health plans. In 2022, 43% of working age adults were inadequately insured, according to the Commonwealth Fund.
“This really is the Republican ideal of a healthcare system,” said Eagan Kemp, a healthcare policy advocate at Public Citizen, about the US’s health system today. “You can extract maximum profit, it’s the wild west compared to similarly wealthy countries.”
For Republican members of Congress, it’s also the easiest to agree on. Donald Trump, the front-runner for the Republican presidential nomination, continues to argue Obamacare should be repealed, even as it is broadly popular, and an effort to repeal the ACA failed dramatically in 2017. Hospital transparency was enacted two years later by executive order. As of February 2023, only a quarter of hospitals complied with the law.
“The real issue is often disparity in information and disparity in bargaining power – and transparency does not address” the latter, said Harold Pollack, a health economist and professor at the University of Chicago. “A lot of the high prices in medical care are not coming from any lack of transparency. They’re coming from the sheer ability to charge what they want to charge.”
In addition to lack of negotiating power – Pollack compares the power imbalance between patients and hospitals to playing a one-on-one basketball game with LeBron James – there are also vulnerable moments when people need healthcare, and comparison shopping is simply unrealistic. In just an example from Pollack’s life, there was an incident a few years ago when his wife needed emergency cardiac care.
“At that point, I was a health services research expert and I didn’t do any comparison shopping at all – I didn’t even look into the relative skill in providing cardiac care” between hospitals, said Pollack. “My wife had an emergency – I took her to the nearest hospital.”
Critics of market-based transparency rules argue that getting a knee replacement is not like buying a car, and that even if US healthcare were not an opaque and labyrinthine viper’s nest of predatory billing, “demand” for health services is not like demand for a new mattress. In other words, you can’t negotiate from a gurney.
“The only folks really doing great are insurers, pharmaceutical makers, some of the big for-profit hospitals and even some non-profit hospitals that have billions in reserves. Those are the folks doing well,” said Kemp. “The folks doing poorly are patients.”
Public Citizen promotes Medicare for All, a single-payer system that would more closely resemble the National Health Service in the United Kingdom than traditional private insurance. In that system, payments would be negotiated between the government and healthcare providers – not shopped by patients.
The Lower Prices, More Transparency Act still needs to be passed by the Senate and signed by Joe Biden to become law. Advocates, like Kelmar, hope the Senate will pass the bill before 19 January 2024, when Congress hits a self-imposed fiscal cliff.
The bill also includes a number of important funding measures, including payments to hospitals that provide care to large numbers of low-income individuals (called Disproportionate Share Hospital payments), funding for community health clinics and significant cuts to Medicare payments to hospitals who provide care off-site.
Written by Jessica Glenza for The Guardian ~ December 19, 2023