I’m thankful that I had the opportunity to testify at a congressional hearing last week on steps lawmakers can take to expand access to more affordable and higher-quality health care. While the other witnesses concentrated on what government can do to expand its control over health care, I explained how government policies often increase prices and have unintended, adverse consequences. I also offered a series of reforms that would empower patients with more options, free doctors and providers to best meet patient needs, and create a climate conducive for medical and pharmaceutical innovation.
I’m excited about the role Paragon Health Institute can play, educating lawmakers of both parties about positive policy solutions.
You can read my written testimony here. A video of the hearing is available here.
Help for Small Businesses
I recommended that Congress codify additional coverage options for families and businesses, including Association Health Plans (AHPs), short-term limited-duration insurance, and individual coverage health reimbursement arrangements (which has been referred to as the 401(k) of health insurance). I also recommended that Congress codify price transparency rules to improve the functioning of health care markets.
Subcommittee Chairman Mark DeSaulnier (D-Calif.), a former restaurant and bar owner, expressed an interest in further conversations with me on reforms that would help restaurants and other small businesses, especially given the COVID pandemic’s impact.
“I really worry about small businesses, having spent 35 years in the restaurant business and having many dear friends still in that business coming out of COVID,” DeSaulnier said. “This is a big, big issue for small businesses. I personally think it should be non-partisan.”
Emerging Bipartisan Consensus on Scrutinizing Nonprofit Hospital Mergers
Medpage Today reported on the hearing, highlighting exchanges I had with lawmakers about how hospital consolidations increase costs and should have increased oversight:
Democrats and Republicans in Congress may disagree on the best way to achieve universal health insurance coverage, but there is one thing they can agree on: health system consolidation won’t help.
“After the ACA [Affordable Care Act] was enacted between 2009 and 2014, hospital consolidation increased, hospitals acquiring physician practices increased,” Brian Blase, PhD, president of the Paragon Health Institute … said Thursday in response to a question from Rep. Jim Banks (R-Ind.) at a House hearing on universal coverage.
“When hospitals acquire physician practices, one of the problems is you get referrals within that hospital system without competition,” said Blase. “It is a clear agreement across health economics that consolidation significantly increases prices.”
Rep. Pramila Jayapal (D-Wash.), a member of the full Education and Labor Committee, agreed. “I share Rep. Banks’s concern about hospital consolidation increasing health care costs,” she said. “And Mr. Blase’s suggestion that the FTC be able to scrutinize mergers among nonprofits is actually exactly what my forthcoming bill would do — that’s something I think will have tremendous bipartisan support.”
I’ve studied the impact of hospital consolidations and the role that nonprofit hospitals play in increasing health care prices. Paragon Public Advisor and former director of the White House’s National Economic Council Al Hubbard and I recently wrote a Wall Street Journal op-ed about high hospital prices in Rep. Banks’ home state of Indiana. Policymakers must increase competition in the hospital market, including stopping bad policies like certificate of need (CON) laws, certificates of public advantage, and the ACA’s payment limits on physician-owned hospitals.
Government Intervention: Often the Wrong Prescription
I also took the opportunity during my testimony to highlight how government intervention often leads to problematic results:
…as government’s role in health care has expanded, prices have skyrocketed. By contrast, in industries where government’s role is minimal, inflation-adjusted prices typically decline while quality improves.
High health care prices and spending that correspond to meaningful health and longevity gains have justification. Some areas of U.S. health care, like our cancer survival rates, are exceptional compared to other developed nations.
Too often, however, high prices and spending do not correspond to high value and improved health. This is a key problem to confront in health policy.
For example, the ACA expanded coverage and significantly increased federal health spending primarily through Medicaid, but American life expectancy declined for three straight years after the ACA’s coverage provisions took effect. In fact, Americans’ life expectancy was lower in 2019 than in 2013….
Don’t Wait for Washington
I recently joined two co-authors of Paragon’s new state health policy reform book, Don’t Wait for Washington, on the American Legislative Exchange Council’s (ALEC) podcast Across the States, hosted by Matthew Fisher.
Naomi Lopez, director of health care policy at the Goldwater Institute, and Matt Mitchell, senior research fellow and director of the Equal Liberty Initiative at Mercatus Center, joined me in discussing how state policymakers can increase information to empower health care consumers, make it easier for health care providers and entrepreneurs to increase access to care, and be better stewards of state programs like Medicaid.
Lopez, who wrote the chapter on telehealth, said the benefits of telehealth were proven during the COVID pandemic when the federal and state governments eased restrictions. She described how telehealth has tremendous potential to improve the quality of life of older Americans by providing greater access to care options.
Mitchell, who wrote the chapter on CON laws, highlighted the problems of these laws that limit competition in the health care marketplace. He said that many peer-reviewed studies show CON laws increase costs, limit access to care, and decrease quality.
Although just launched three months ago, Paragon is already making a difference at both the federal and state levels. We look forward to continuing to build on our initial progress and providing alternatives to expanded government power that instead focus on increased health care freedom for Americans.
Paragon Health Institute