NEW MEMO: The Momentum Is Real – Hospital Reform Is Advancing
At breakneck pace, congressional scrutiny of hospital billing practices has advanced to the lawmaking phase. And the momentum for reform is real.
The burgeoning consensus provides an opportunity for lawmakers to a secure a win for their constituents and address a top-tier voter priority: the alarmingly high prices for health care services in America increasingly driven by hospitals. While a debate over funding the government will dominate headlines in the coming weeks, this fall holds the promise of bipartisan action to rein in one of the key drivers of these high costs: dishonest billing practices by hospitals.
Here’s the state of play:
Before the August recess, three health care committees in the House all passed legislation that would crack down on the practice of health systems billing significantly more for a service simply because it was done at a hospital-affiliated or hospital-owned setting. “Site neutral” payment reform seeks to equalize the prices charged regardless of the setting of care.
In recent weeks, these three committees worked together to produce a unified bill. This tri-committee product was released last week. The increasingly rare jurisdictional cooperation underscores the opportunity that lawmakers see to advance real reform to address health care affordability. There is also bipartisan Senate interest in this policy as well.
As House leaders plot the fall schedule, the tri-committee bill will be an obvious opportunity to advance a positive agenda and respond to the more than three-quarters of voters who believe hospitals are charging unreasonable prices for care, according to recent polling.
Lawmakers have indicated they are increasingly unlikely to accept arguments that hospitals have long relied on: namely, that any payment reductions would hinder access to patient care and that Medicare doesn’t pay enough to cover the costs of providing care.
Some of the harshest criticism has come from Republicans.
“Hospital care accounts for nearly one-third of all the health care spending — over $1.3 trillion in 2021,” Florida Republican Rep. Vern Buchanan, who chairs the Ways and Means Health Subcommittee, said during a hearing last month. “This spending will only continue to increase if we don’t find ways to create more ‘site-neutral’ and increased competition in areas where one health care system buys up or drives out all the others.”
A paper circulating on Capitol Hill attributed the financial losses of large, nonprofit hospital systems to risky investments in the stock market, not significant increases in labor costs as hospitals have claimed.
Addressing dishonest billing remains a top priority for the employer community, which bears the cost, along with patients, for the high prices being charged by hospitals. These reforms have broad-based support from think tanks and advocacy groups, as well as dozens of employers groups across the country.
Corporate hospital systems and their private equity backers will no doubt continue to fight these changes, but with one out of every three health care dollars going to hospitals, these bad practices can no longer be ignored. That’s why Republicans and Democrats alike have sounded the alarm about ways hospitals are driving up costs for patients and the federal government.
Two voices for American employers recently wrote an op-ed that underscores the challenge:
- A $629 bill for a 1-year-old to receive a Band-Aid. A $722.50 charge for every push of medicine through an IV. A $17,850 bill for a single drug test. These are real stories of patients charged exorbitant prices for services. There are numerous examples like this across the country. Far from being fluke occurrences, the hospital industry has institutionalized anti-competitive practices that play a leading role in the health care affordability crisis. Over the last ten years, the cost of providing employee coverage has increased 47 percent, with hospital care serving as the top driver of health care costs.
As this legislative push advances, Better Solutions for Healthcare – a national coalition of employer and healthcare groups – will continue to shine a spotlight on dishonest billing by hospitals, as well as other health system practices that are needlessly driving up costs.