The divisive midterm elections are finally over, and with the resulting divided Congress, only legislation supported by both parties has a chance to become law. The new Congress can come together and score an early bipartisan victory by addressing one of the most pressing issues facing all Americans: the health care cost crisis.
According to a recent Gallup poll, nearly 40% 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 care policy ahead of political party preference.
The health care solution that receives the widest bipartisan support is health care price transparency, which is supported by a supermajority of nearly 90% of Americans. By codifying and strengthening a federal hospital price transparency rule into law, Congress can empower Americans to significantly reduce their health care costs through choice and competition.
Addressing runaway health care costs is urgently needed. Recently, the Labor Department revealed that the cost of health insurance rose 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 employer-sponsored family health care premium will reach $22,463 in 2022, nearly one-third of the nation’s median household income.
Experts predict that costs will rise even faster next year. Numerous health plans, including the one covering public workers in New Jersey, have set rate increases of more than 20% for 2023.
As a result of rising health care costs, 100 million Americans have medical debt, and nearly two-thirds avoid care each year for fear of financial ruin. Rapidly rising employer health insurance costs are attacking American businesses and cannibalizing funds that could otherwise go toward pay increases to help workers cope with historic inflation.
Failure to act in the face of this disaster is evidence of a form of Stockholm syndrome for health care.
Simply increasing the number of Americans with health insurance means little if consumers cannot 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 see the well-documented, wild price swings for the same care, even at the same hospital. For example, at one hospital in California, the price of a C-section ranges from $6,200 to $60,600. A recent study published in the journal Radiology found CT scans can range from $134 to $4,065 at the same hospital.
Armed with real prices, consumers can eschew rampant hospital prices in favor of quality, less expensive alternatives for the more than 90% of non-emergency health care spending. 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 resulting savings to reduce premiums and raise wages. Consider the union SEIU 32BJ, which represents approximately 200,000 building service workers across the Northeast. It recently gave its members their biggest pay raises in history and $3,000 bonuses after analyzing its claims data and removing price-gouging hospital New York-Presbyterian from its plan.
On January 1, 2021, a federal hospital price transparency rule went into effect 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 has been undermined by widespread hospital non-compliance. A recent study by PatientRightsAdvocate.org found that only 16% of hospitals are fully compliant.
Congress can promote 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 compile prices in easy-to-use web applications such as travel websites airline tickets on sites like Gathering Kayak or Expedia.
Lawmakers could further improve the rule by eliminating a loophole that allows hospitals to post estimates instead of actual prices. Cost estimates are faux transparency. Only real prices empower consumers to compare and save significantly with peace of mind that the final bill will match the quoted price.
The new Congress could score an early victory by reversing runaway health care costs through robust price transparency, a solution supported by an overwhelming bipartisan supermajority. The divided Congress must make this health care its top priority.
Cynthia A. Fisher is founder and chairman of PatientRightsAdvocate.organd the founder and former CEO of ViaCord Inc. She wrote this column for The Dallas Morning News.
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