by Drew Johnson
When then-President Barack Obama launched Obamacare, he declared that if you liked your doctors, you could keep them. That wasn’t true, as many patients soon found out.
Unfortunately, a new proposal by Tennessee’s Sen. Lamar Alexander may turn out even worse for patients than Obama’s false promise.
Under Alexander’s new plan, it may not matter whether you like your doctors or not. They may not even be practicing medicine for much longer. Alexander’s socialist-style price control scheme would cause doctor pay to plummet and lead many health care professionals to retire or move to more lucrative fields.
Alexander’s bill, called the Lower Health Care Costs Act (LHCC), aims to solve the problem of surprise medical billing. That happens when patients think they are at an in-network facility but end up with a big out-of-network bill.
It’s a serious issue. Patients are suffering, and they shouldn’t be getting hit with big bills for in-network emergency care. Everyone wants to solve that problem. The question is how to do it.
I, along with a number of free market advocates, critiqued Sen. Alexander’s remedy as a “solution” that will breed more problems than it will solve. In response, he recently published an op-ed in the Tennessean to defend his legislation and provide further context and explanation for what it does.
Alexander says he wrote the bill, but seems not to have read it.
In the op-ed, he said that his legislation proposes a free market solution to soaring ER bills, but it does the opposite. The bill tells the Secretary of Health and Human Services to “determine the methodology a group health plan or health insurance issuer is required to use to determine the median in-network rate” that would be mandated by the new law.
Empowering an unelected bureaucrat to use the federal government’s rulemaking power to set prices in a market isn’t a “free market” as Alexander claims. It’s a price control. And it’s socialism.
Alexander doesn’t even seem to understand the problem he’s trying to solve. In his op-ed, he blames health care providers and administrators for the rising costs. He claims they “benefit from the status quo, which is becoming increasingly unbearable for patients.” But the actors responsible for the jump in surprise medical bills are primarily big insurance companies, not doctors and providers.
Recently, both UnitedHealth and Anthem BlueCross made the news for refusing to provide coverage to patients. In spite of losing in court, the companies may still appeal and drag the process out longer. That’s the sort of expensive legal action that insurance companies engage in, while customers pay the price and suffer. If Alexander’s bill passes, the companies will be even more powerful, able to manipulate the “benchmark local pricing” outlined in the legislation and start squeezing doctor pay lower. More Americans will lose the doctors and care centers they depend on the most, while costs go up indirectly on their care visits.
There’s a much better prescription available, and Alexander is apparently aware of it. “Some have suggested that Congress instead adopt a new system of third-party arbitration, or Independent Dispute Resolution, for settling such billing disputes between insurance companies and doctors and hospitals,” he wrote. Unlike his proposal, that’s a useful market solution that could actually reduce prices.
In the state of New York, for example, there’s a process that’s similar to the arbitration used in Major League Baseball. When there’s a disputed bill, the hospital and the insurance company each submit what they think is a fair price, and an independent arbiter selects one price or the other. Each side needs to be reasonable, because if their price is too high they could end up forced to settle for far less. Prices seem to be under control, and patients have a real market response to high surprise medical bills.
Patients can and must be protected from big surprise medical bills. But lawmakers should never seriously consider Sen. Lamar Alexander’s proposed solution. Any option that would chase caregivers out of medicine and sock patients with more indirect hidden costs isn’t really an option at all.
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Drew Johnson is a senior fellow at the National Center for Public Policy Research and a columnist at Newsmax. The Johnson City native and longtime Nashville resident founded Tennessee’s free market think tank.