The divisive midterm elections are finally over, and with the outcome of a divided Congress, only bipartisan legislation has a chance of becoming law. The new Congress can come together and score an early bipartisan victory by tackling one of the most pressing issues facing all Americans: the health care spending crisis.
According to a recent Gallup poll, nearly 40 percent of Americans are willing to switch their vote to the candidate with the best solutions to the nation’s health care problem. In other words, many people are willing to put effective health policy above political party preferences.
The health care solution that receives the broadest bipartisan support is health care price transparency, which is supported by an overwhelming majority of nearly 90% of Americans. By codifying and strengthening the federal Hospital Price Transparency Rule into law, Congress can empower Americans to significantly lower their health care costs through choice and competition.
Urgent measures are needed to address the problems of rapid health care costs. The Department of Labor recently revealed that the cost of health insurance has risen 20.6% over the previous year, nearly three times the overall rate of inflation. Last month, the Kaiser Family Foundation announced that the average annual premium for employer-sponsored family health care will reach $22,463 in 2022, nearly one-third of the nation’s median household income.
Experts predict that spending will grow even faster next year. Numerous health plans, including the one that covers public workers in New Jersey, have implemented rate increases of more than 20 percent for 2023.
As a result of skyrocketing health care costs, 100 million Americans have medical debt and nearly two-thirds avoid care each year for fear of financial ruin. The skyrocketing costs of employer health insurance are attacking American businesses and cannibalizing funds that could otherwise go toward wage increases to help workers fight historic inflation.
Failure to act in the face of this disaster is evidence of a form of Stockholm syndrome of healthcare.
Just increasing the number of Americans with health insurance means little if consumers can’t afford premiums or care. In contrast, price transparency can actually bend the cost curve.
Actual upfront pricing allows health care consumers, including employers and unions, to spot the well-documented, wild price swings for the same care, even at the same hospital. For example, in a California hospital, the cost of a cesarean section ranges from $6,200 to $60,600. A recent study published in radiology found that a CT scan could range from $134 to $4,065 at the same hospital.
Armed with real prices, consumers can avoid rampant hospital price gouging in favor of quality, lower-cost alternatives for more than 90% of non-emergency health care costs. When prices are known in advance, no consumer will tolerate paying 10 times more than the person in the bed next to them for the same care.
Employers and unions can use the resulting savings to lower premiums and raise wages. Consider the SEIU 32BJ union, which represents approximately 200,000 construction service workers throughout the Northeast. It recently gave its members the biggest pay raises in history and $3,000 in bonuses after analyzing its claims data and cutting price-gouging New York-Presbyterian Hospital from its plan.
A federal hospital price transparency rule went into effect on January 1, 2021, requiring hospitals to publish their discounted cash prices and all health insurance rates. This information can make it easier for health care consumers to follow the lead of SEIU 32BJ and other innovative employers.
Unfortunately, the rule is marred by widespread hospital noncompliance. A recent study by PatientRightsAdvocate.org found that only 16% of hospitals are in full compliance.
Congress can increase compliance and improve the rule by codifying it into law. It could make the rule more effective for consumers by requiring hospitals to follow clear data disclosure standards to allow third-party technology innovators to aggregate prices into easy-to-use web apps the way travel websites do. collect flight tickets on sites like Kayak or Expedia.
Lawmakers could further improve the rule by removing a loophole that allows hospitals to post estimates instead of actual prices. Cost estimates are a false transparency. Only actual prices allow consumers to compare and save significantly with peace of mind that the final bill will match the listed price.
The new Congress could score an early victory by reversing rapid health care spending through robust price transparency, a decision supported by overwhelming bipartisan majorities. A divided Congress must make this health care decision its top priority.
Cynthia A. Fisher is the founder and president of PatientRightsAdvocate.organd founder and former CEO of ViaCord Inc. She wrote this column for The Dallas Morning News.
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