House Bill to Make US Healthcare Costs Transparent Unlikely to Bring Down Prices

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   The House has given the nod to a healthcare reform bill that could simplify the daunting task of discovering the cost of a doctor's appointment or procedure before actually getting it – a challenge that presently varies from incredibly tough to nearly impossible.

This bipartisan bill mandates hospitals, diagnostic labs, imaging services, surgical centers, and pharmacy benefit managers to publicly disclose their prices. Advocates argue that this move could potentially reduce healthcare expenses as individuals become empowered "consumers" able to shop around for the best deals.

"Healthcare costs are through the roof, and the system is overly complicated," remarked Cathy McMorris Rodgers, the Republican chair of the House Energy and Commerce Committee from Washington state, during a House floor vote on Monday. The bill, securing a 320-71 victory, aims to cut costs for Americans by enhancing transparency in healthcare pricing, according to McMorris Rodgers.

While transparency enjoys support from various quarters, with consumer advocates among its fans, the bill is not universally hailed as a cure-all for delivering affordable healthcare, especially outside the Republican party.

Describing the bill as a "tremendous step forward," Patricia Kelmar, the healthcare campaign director for the US Public Interest Research Group, a consumer advocacy organization that actively advocated for the bill, emphasized the fundamental nature of the information consumers deserve to know. However, she also pointed out, "there's no one solution to the high cost or price for healthcare."

The relentless rise of healthcare expenses as a percentage of the gross domestic product (GDP) is evident, climbing from 5% in 1960 to over 18% in 2022. Presently, the average spending on healthcare per person in the US surpasses $12,000.

Over the past decade, individuals have been grappling with the escalating costs of healthcare, a trend influenced, in part, by a prevailing philosophy dominating health reform discussions since the early 2000s.

Frequently championed by Republicans, this ideology underscores the idea that patients are essentially "consumers," placing importance on "personal responsibility" and insisting that individuals should have some financial stake, or "skin in the game."

In line with this perspective, Republicans played a key role in popularizing the "consumer-driven" health plan. This involved creating a tax-exempt savings plan linked to health insurance but accompanied by notably high deductibles.

Now commonly referred to as high deductible health plans, these plans necessitate that patients shell out thousands of dollars before insurers kick in, sometimes reaching as high as $9,050 annually for individual plans.

Over the past decade, large employers have been drawn to these plans, despite criticism for pushing patients into medical debt. The market for high deductible health plans surged from a mere 4% of employer-sponsored health insurance in 2005 to 28% in 2022. Notably, around two-thirds of Americans employed by large companies (with over 1,000 employees) are now enrolled in high deductible health plans.

When Democrats passed the Affordable Care Act in 2010, these plans largely remained untouched. Back then, the primary focus of health reform was seen as providing insurance to millions who lacked access. In this regard, the reforms were successful—the rate of uninsured individuals in the US is at a historic low, hovering around 8%, equivalent to approximately 26 million people.

However, as high deductible health plans gained popularity, the percentage of individuals who are under-insured or unable to afford utilizing their insurance has steadily risen. According to the Commonwealth Fund, in 2022, a staggering 43% of working-age adults found themselves inadequately insured.

Describing the current state of the US healthcare system, Eagan Kemp, a healthcare policy advocate at Public Citizen, remarked, "This really is the Republican ideal of a healthcare system. You can extract maximum profit; it's the wild west compared to similarly wealthy countries."

For Republican members of Congress, repealing Obamacare remains a shared stance, notably championed by Donald Trump, the leading contender for the Republican presidential nomination. Despite the broad popularity of Obamacare and the dramatic failure of attempts to repeal the Affordable Care Act (ACA) in 2017, Trump persists in advocating for its repeal. Hospital transparency, enacted through executive order two years later, has seen slow compliance, with only a quarter of hospitals adhering to the law as of February 2023.

Harold Pollack, a health economist and professor at the University of Chicago, points out that the real issue often lies in the disparity of information and bargaining power. Transparency, he argues, doesn't address the latter. According to Pollack, many high prices in medical care don't stem from a lack of transparency but rather from the ability to charge whatever the market allows.

Besides the inherent lack of negotiating power, Harold Pollack draws attention to the unequal balance of power between patients and hospitals, likening it to playing a one-on-one basketball game with LeBron James. Additionally, there are critical moments when people require healthcare, making comparison shopping impractical. Pollack shares a personal example from 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," Pollack recalled. "My wife had an emergency – I took her to the nearest hospital."

Critics of market-based transparency rules argue that healthcare decisions, particularly during emergencies, differ significantly from consumer choices like buying a car. Even if the US healthcare system were more transparent and straightforward, the demand for health services doesn't align with the consumer-driven model. In other words, negotiating from a hospital bed is not comparable to negotiating for a new mattress.

"The ones truly thriving are insurers, pharmaceutical companies, some major for-profit hospitals, and even some non-profit hospitals with substantial reserves. Those are the ones doing well," remarked Kemp. "The ones struggling are the patients."

Public Citizen advocates for Medicare for All, a single-payer system resembling the National Health Service in the United Kingdom rather than traditional private insurance. In this system, payments would be negotiated between the government and healthcare providers, eliminating the need for patients to shop for services.

The fate of the Lower Prices, More Transparency Act hinges on approval from the Senate and a signature from Joe Biden to become law. Advocates, including Kelmar, are optimistic that the Senate will pass the bill before January 19, 2024, a deadline set by Congress for crucial fiscal decisions.

The bill encompasses several critical funding measures, including payments to hospitals that offer care to significant numbers of low-income individuals, known as Disproportionate Share Hospital payments. It also allocates funds for community health clinics while implementing substantial cuts to Medicare payments for hospitals providing off-site care.