There is an impulse among some lawmakers that whatever the problem, more government is the answer. The most harmful example currently in Congress is surprise billing legislation threatening to upend our health care system in a way that raises costs and reduces critical medical care.
Already, U.S. health care suffers from aggressive government interventionism. Even as the Affordable Care Act and low Medicaid and Medicare reimbursements have disturbed the market, the costs for most families have not miraculously become affordable. Among their financial challenges is the unwelcome arrival of the unexpected medical bill.
Surprise bills can happen when a patient must be rushed to the nearest emergency room, despite it being out of their health plan network. They’re also common when an attending medical professional at an in-network hospital — an anesthesiologist for a surgery, for example — isn’t on the patient’s plan and invoices separately.
One should not understate the burden these surprise medical bills place on families each year, and solutions to address this financial havoc should put patients in a better position to handle costs. Unfortunately, the surprise billing proposals currently emanating from Washington fail this test.
That’s because they rely on federally mandated rates for out-of-network medical care. Such price controls are a heavy-handed most often seen in socialist economies. In this case, they will serve the interests of the big health insurance companies, whose in-network payment scales would form the benchmark for the new government-mandated rate.
The opportunity this presents for insurers to engage in price-fixing is obvious. When doctors attempt to negotiate fair rates to join a health plan network, there would be no impetus for the insurance company to make a deal. If the physician group walks away from the table, the insurer will pay the doctors the average in-network rate anyway.
What’s worse, the more doctors at the higher end of the rate scale insurers compel to leave their networks, the lower the median rate will fall, and with it the government-mandated price. Playing hardball with doctors will be richly rewarded.
Unfortunately, the resulting networks will become exceedingly narrow. If only a handful of local doctors participate, insured patients will struggle to find in-network providers. They will either endure long waits or go out-of-network and bear the higher fees their health plan charges. Rather than pay $25 to see a specialist, the out-of-pocket cost could be $100 or more.
Longer term, there are extreme consequences to these market disturbances. Small practices will be squeezed to the brink of bankruptcy. In some areas, mostly in cities, more doctors will be swallowed up by the large physician groups.
Personalized care will decline, and corporatized medical practices will duke it out with the insurance companies to raise prices. In fact, the Congressional Budget Office predicts up to 20 percent higher health care costs from such consolidation.
In other areas, primarily remote parts of the country, the small-town doctor’s practice will not survive and the rural hospital will be more likely to close. Residents will be forced to travel to the closest urban center for care, and for the many who cannot do so, their health will be placed in jeopardy.
It’s no mystery why the insurance companies are backing this legislation. As crony capitalism, it succeeds perfectly. Insurers will pay doctors less and shift more costs to patients. When the health care system begins to fail us, it won’t matter much to shareholders raving about large profits. But sadly, if we permit the government to put a finger on the scale with this surprise billing legislation, consumers will wake up one day soon to wonder what we have done to lose our access to the worlds’ best medical care.