How to “fix” healthcare is becoming a big issue in the Democratic primary. But, more importantly, fixing healthcare is an important issue for the hundreds of millions of citizens who need quality medical services. The Taxpayers Protection Alliance has highlighted the myriad issues facing millions of patients and is working to stop any government-run healthcare plans from passing Congress. We are concerned that once the government gets involved, the price tag will go up and the quality of care will go down. This Weekly Update explores the patient and taxpayer implications of three healthcare issues: surprise billing “solutions,” Medicare for All, and drug pricing schemes.
Surprise Billing
This issue may be of the most immediate concern, since Congress may be acting in the next month or two to address surprise billing. For millions of Americans, the anguish of emergency room visits doesn’t end with discharge papers. Patients typically assume that their payments are taken care of by their insurer, only to receive a surprise medical bill in the mail weeks later. And unfortunately, federal policymakers are intent on making a miserable situation even worse. Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) have introduced legislation that would impose an onerous system of price-fixing for health care providers across the country. This disastrous legislation threatens medical practices in rural areas already struggling to recruit doctors. Instead of shuttering hospitals and clinics in communities across the country, policymakers should embrace market-based solutions that could end the scourge of surprise billing. Fortunately, there’s a better solution that wouldn’t compromise medical care for patients.
Dr. (and Sen.) Bill Cassidy’s (R-La.) STOP Surprise Bills Act of 2019 would use a baseball-style arbitration approach to work out payment disputes between doctors and insurers. The proposal would embolden a neutral arbiter (via an online portal) to sort out billing quibbles between the different parties who would submit rival claims to the third-party. This approach has already paid dividends in New York State, which rolled out a health care arbitration system in 2015. Since then, out-of-network rates have dropped by more than a third in the Empire State, as thousands of billing disputes have been taken out of the hands of patients. As New York’s experience demonstrates, it is possible to solve the surprise billing crisis without an onerous federal price-setting scheme. With nationwide arbitration, physicians and insurers would be able to settle payment disputes without a draconian cut to provider rates. Emergency rooms are bad enough and policymakers should strive to minimize the financial toll of medical maladies for patients. Sen. Cassidy’s approach accomplishes this goal, while keeping doctors on the job.
Be sure to check out our Surprise Billing page for a good explanation of the issue and overview of solutions that will help patients and protect taxpayers.
Medicare for All
Sen. Elizabeth Warren (D-Mass.) just admitted that her Medicare for All proposal will cost $52 trillion. And, yes, of course, taxes on the middle class will have to be increased to pay for that. Besides the obscene price tag, Medicare for All just won’t work. To listen to Sen. Warren, the current U.S. healthcare system is little more than a Rube Goldberg machine. Warren thinks that, if the system is “streamlined” to cut out the pesky middleman profits, then the system will actually save money. But the surging presidential candidate ascribes a fairytale ending to a likely dystopia. To get a sense of what government-run healthcare looks like, we needn’t turn to European countries and debate the applicability to the American system. Quadrants of the U.S. system are already socialized, but the resulting failures have largely escaped the attention of the U.S. media. Run directly by the Department of Health and Human Service (HHS), the Indian Health Service (IHS) administers healthcare in 330 Indian territories across the country. Similar to the Medicare for All approach, the service funds doctors and hospitals and dictates quality of care. This expansive promise to Native Americans is the understandable result of centuries of mistreatment at the hands of the federal government. But unfortunately, this guaranteed care does not amount to much.
Sen. Warren (and any other candidate who proposes Medicare for All) are out of touch with the current healthcare system and overall financial state of the country. If the healthcare system is so broken in the United States, why did Sen. Bernie Sanders (I-Vt.), a supporter of government-run healthcare, not go to Canada for treatment after his heart attack?
Drug Pricing Schemes
Presidential candidates and members of Congress are always among the first to propose a “solution” to some pressing issue, but the last to lead on actual reforms. Case in point: America’s drug pricing system, which seemingly every politician knows how to fix. The most recent proposal comes from House of Representatives Speaker Nancy Pelosi (D-Calif.), who offered H.R. 3 which would lower medication costs by the sheer force of federal fiat. Speaker Pelosi’s proposed “negotiations” with pharmaceutical companies would end in disaster, slashing medical innovation and compromising care for millions of Americans. Government price-fixing is the wrong prescription for lowering healthcare costs.
Speaker Pelosi’s plan would allow HHS to negotiate prices on 250 drugs per year for public and private plans. A negotiation, of course, implies that both sides have leverage and the ability to walk away from talks. But in Speaker Pelosi’s ideal world, drug companies refusing to negotiate over a medication’s price would be hit with a fine equal to 75 percent of that medication’s sales from the previous year.
If this policy “works” and intimidates manufacturers into lowering prices, the result would be a rehashing of Europe’s many problems with medication payment and production. Europe used to be a global center of biomedical innovation. Fast-forward a few decades and endless government tinkering, and drug manufacturers have largely ditched their European operations. Over the past 50 years, the share of new drugs originating in countries such as France, Germany, and the U.K. has plummeted from 45 percent to 20 percent. Manufacturers mostly flocked to America, which provides companies across industries pricing flexibility and strong intellectual property protections. Drug producers have relocated en masse and sold their medications on markets not marred by government price-fixing. Americans currently need not worry about shortages of popular, life-saving drugs such as statins (ordinarily prescribed for cholesterol control). Unfortunately, Europeans cannot say the same. Nearly 40 percent of surveyed European pharmacists cited heart medication shortages as a significant issue in 2018.
If price-fixing becomes a reality, Americans could soon be caught up in the same problems faced by their European counterparts. Policymakers like to believe that only they can lower drug prices, but this clearly isn’t the case. Thanks to a robust economy and vibrant competition, drug prices declined by more than 1 percent in 2018 (the largest yearly decline since 1972). Lawmakers and the White House can help keep this process going by streamlining an increasingly-complex, risk averse FDA approval process that doesn’t consider drugs’ actual risks and rewards. But doubling-down on failed government “solutions” is hardly what the doctor ordered.
Blogs:
Tuesday: A red-ink-drenched postal service
Wednesday: America Needs Doctors in the Digital Domain
Thursday: Taxpayers won’t benefit from Vegas stadium naming rights
Friday: Senator Sanders Doing Well, Thanks to Market-Based Medicine
Media:
October 18, 2019: The FDA Reporter mentioned TPA in their story, “Former FDA official responds – in part – to Taxpayers Protection Alliance's suggested reforms.”
November 4, 2019: I appeared on WBOB Radio (600 AM and 101 FM; Jacksonville, Fla.) to talk about a potential government shutdown.
November 4, 2019: Townhall ran TPA’s op-ed, “Patients and Taxpayers Will Pay for 'Medicare for All' Failures.”
November 5, 2019: Catalyst ran TPA’s op-ed, “Germany Shows Universal Healthcare is No Panacea.”
November 5, 2019: National Interest ran TPA’s op-ed, “This Bizarre Law Prevents Poland from Capitalizing on Copper Mine Profits.”
November 5, 2019: Yahoo! News ran TPA’s op-ed, “This Bizarre Law Prevents Poland from Capitalizing on Copper Mine Profits.”
November 6, 2019: The Center Square ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Impact (North Bay Springs, MS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Chariton Leader (Chariton, IA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Branford Seven (Branford, CT) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: KTBS3 (ABC; Shreveport, LA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Neighbor (Roswell, GA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Waldron News (Waldron, AR) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Ashley News Observer (Crossett, AR) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Bellevue Herald-Leader (Bellevue, IA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Perryville News (Perryville, MO) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Clay Center Dispatch (Clay Center, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Killeen Daily Herald (Killeen, TX) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Greeneville Sun (Greeneville, TN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Henderson News (Henderson, TX) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Daily Star-Journal (Warrensburg, MO) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Inside NOVA (Washington, VA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Monterey County Weekly (Seaside, CA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: FOX41 (Yakima, WA) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Olean Times Herald (Olean, NY) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Chanute Tribune (Chanute, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Emporia Gazette (Emporia, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Purcell Register (Purcell, OK) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Rogersville Review (Rogersville, TN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Katy Times (Katy, TX) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Aberdeen News (Aberdeen, SD) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The News-Graphic (Georgetown, KY) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Appalachian News-Express (Pikeville, KY) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: KPC News (Kendallville, IN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Douglas-Budget (Douglas, WY) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Mena Star (Mena, AR) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Parsons Sun (Parsons, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Herald-News (Dayton, TN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Chronicle-News (Trinidad, CO) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Barron News-Shield (Barron, WI) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Webster County Citizen (Seymour, MO) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Advocate & Democrat (Sweetwater, TN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Harrison Daily Times (Harrison, AK) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Newport Plain Talk (Newport, TN) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Black Hills Pioneer (Spearfish, SD) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Derby Informer (Derby, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Iosco County News Herald (East Tawas, MI) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Miami County Republic (Paola, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Center Square ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Newton County Times (Jasper, AR) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: The Atchison Daily Globe (Atchison, KS) ran TPA’s op-ed, “New York’s solution to 'surprise billing' withstands scrutiny.”
November 6, 2019: Inside Sources quoted TPA in their story, “Maggie Hassan Part of ‘Dynamic Bipartisan Duo’ Pushing Surprise Medical Billing Legislation.”
November 7, 2019: WBFF (Fox; Baltimore, MD) interviewed me about problems at the Department of Veterans Affairs.
November 7, 2019: The Center Square ran TPAF investigative reporter Johnny Kampis’ op-ed, “Beverly Hills finds delays, cost overruns in its municipal broadband efforts.”
November 7, 2019: TPA policy director Ross Marchand appeared on “The Sam Sorbo Show” (nationally syndicated) to talk about a potential government shutdown.
November 7, 2019: Bloomberg quoted TPA in their story, “Intelsat Pitch to Sell U.S. Airwaves Sparks Fight Over Spoils.”
November 8, 2019: TPA policy director Ross Marchand appeared on “The Morning Show with Austin Petersen and John Marsh” (KWOS; Jefferson City, MO) to talk about “surprise billing” issues and healthcare reform.
Have a great weekend, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
