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Next Coronavirus Stimulus Might Include Healthcare Price Fixing

Late last month, Politico reported the next coronavirus stimulus might include a “fix” for the problem of surprise medical billing.

Trump administration officials are floating a plan that would outlaw health care providers from putting patients on the hook for thousands of dollars in expenses — but without mandating how doctors and hospitals would recover their costs from insurers, according to administration officials, Capitol Hill aides and industry lobbyists familiar with discussions. Billing disputes would have to be worked out on a case-by-case basis.

Because of the complicated health care leviathan, patients have little control over the multitude of people providing care when they must go to the hospital. If some of those health care workers are not part of their insurance network, the patient is on the hook for those costs. If the government does not want the patient to pay, who will pay those doctors and health care workers? Where will the money come from? Are the health care providers and hospitals supposed to eat the costs?

Some in Congress, like Senator Lamar Alexander (R-Tenn.) along with Rep. Frank Pallone (D-N.J.) want to “rate-set” for doctors and have tried to include this in the various coronavirus relief bills. A coalition of groups, the Coalition Against Rate-Setting (CARS)  have fired back against rate-setting and urged President Trump not to consider this short-sighted “solution” to the problem of surprise billing. Rate-setting would “only have Washington, D.C. bureaucrats dictating to doctors the prices they should charge patients.” The last thing our over-regulated health care system needs is more government intervention especially if it gives more power to unaccountable government bureaucrats.

This devastating problem stems from increasingly narrow health insurance networks which increasingly refuse to compensate attending doctors at in-network medical facilities. Far-reaching pieces of legislation such as the Affordable Care Act (aka Obamacare; signed into law in 2010) have simply made the problem worse, and now, an estimated three-quarters of Obamacare plans feature narrow insurance networks.

The group argues that government rate-setting would lead to a “widespread consolidation of hospitals, clinics, and doctor’s offices across the country.” According to the American Journal of Managed Care, rate setting In California rate setting led to more hospitals closing or merging, further limiting health care options.  A letter with the signatures of 160 economist have signed a letter urging the president not to adopt price controls to deal with problems in the healthcare system.

The last thing the American health care system needs is more federal interference. Instead the Trump administration should work to open up the system to competition and free market forces to handle surprise medical billing.