Congress Leaves Promising Health Care Cost Reforms in Limbo

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(Health Care Cost Reforms in Limbo)

Health care as an issue landed with a thud in late December as members of Congress packed up and went home for the holidays. Two important pieces of legislation for patients didn’t make it to the finish line. Passage of either measure next year is a crapshoot since it’s an election year.

One of my journalistic colleagues from the online site Axios summed up the Congressional end-of-the year stalemate this way: “There are lots of goodies for the industry, while patients will get the worst kind of holiday surprise—more medical bills” after Congress failed to enact two promising pieces of legislation.  

First, seniors on Medicare and everyone else will continue to see their prescription bills zoom upward. Second, every American unlucky enough to need hospital care, but particularly emergency room care or surgery, will be at risk for financial complications they didn’t expect.

In fact, unexpected medical costs are the public’s top health concern. Studies indicate families are far more worried about getting socked with surprise bills than they are about getting hit with sky-high deductibles and premiums, or even paying their rent or mortgage. In other words, those unexpected bills are a very big deal. So far, though, Congress has declined to end such practices.

Special interest groups–doctors, particularly anesthesiologists and emergency room physicians, hospitals, air ambulance companies, insurers, and employers–have all lobbied mightily to protect their financial interests. Although those stakeholders agree patients should be protected, there’s no agreement on how much doctors should be paid.

Patients who receive a surprise bill, usually from an out-of-network doctor, would pay their deductible, copays, and coinsurance as if the doctor was in the network. Doctors who send these bills would then be paid by insurers based on the average payment for a service in the geographic area or a sum determined by an outside arbiter, depending on what the eventual legislation requires.

A coalition of employers and insurers prefer negotiated rate settlements while physician groups favor arbitration.

When Congress adjourned at the end of December, a possible solution was deferred until next year.

A bill that would begin to tackle the high prices of prescription drugs passed the House, but Senate approval is uncertain. The bill championed by House Speaker Nancy Pelosi calls for the government to begin negotiating prices for between 50 and 250 drugs paid by the Medicare program. Recall that the 2003 law that gave seniors the benefit prohibited such negotiations.

If prices were negotiated, the bill projects that both consumers and the government would save huge amounts of money. Consumer drug spending would drop by 55 percent and government spending by some $400 billion over the next 10 years. Democrats would like to use that money to expand Medicare coverage to include hearing, vision, and dental benefits.

The bill would also cap out-of-pocket spending on drugs for Medicare beneficiaries at $2,000 a year. Currently some seniors can pay as much as $15,000 annually for a single prescription drug.

“Patients scored a major victory in the fight for lower drug prices” when the House passed its bill, says David Mitchell who founded the advocacy group Patients for Affordable Drugs Now. “The House has done its job. Now the Senate must act.”

Whether it will is a big question mark. While the House drug bill indeed would be landmark legislation if it passes, it’s hard to see drug makers giving up the fight.

It’s estimated that the House bill would cause pharmaceutical industry revenues to drop by about one $1 trillion in the next decade. That explains why the industry has fought long and hard to influence members of Congress to make sure nothing is enacted that derails their gravy train.

Hardly a day went by in recent months without the industry pushing its point of view in sponsored content in Politico, an online publication widely read in Washington. Sponsored content is really advertising, but it’s presented in a way that makes readers think they are reading a legitimate news story.

Axios summed up the latest health care efforts in the House this way: “These policies will materially benefit pretty much every sector within an industry that already wields more financial power than ever.”

Consumers, on the other hand, will find themselves pretty much in the same boat they’ve been sailing in for many a year.

How would you profit if the proposed legislation were to pass? Write to Trudy at trudy.lieberman@gmail.com.

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