Several months ago, though the media barely covered it, President Trump held an event in the White House to draw attention to the problem of surprise medical billing. He invited several victims of the practice to tell their stories.
One man, Drew, told of how he had suffered a heart attack two years ago and been driven to the nearest hospital. Although he had insurance, the hospital was not in his network, so he later opened his mailbox to find a bill for $110,000. Another man, Paul, had taken his daughter to a routine post-op visit after her back surgery. Almost as an afterthought, the doctor requested a urine sample, only to later bill Paul $17,850 for the same type of lab test that can be administered for $50 most other places.
These slippery practices are not uncommon. Every year the health care industry bleeds vulnerable Americans of hundreds of millions of dollars through surprise bills, usually after an emergency procedure or because the patient unwittingly received care from an out-of-network doctor at an in-network facility. It’s a sick practice that Obamacare, naturally, did nothing to address.
Enter President Trump and the Republican Senate. Credit to Senators Lamar Alexander (R-TN) and Bill Cassidy (R-LA) for lighting a fire under Congress to do something about it. Democrats, dying to be the “party of health care” heading into 2020, quickly jumped on the bandwagon. But they are insisting that big government is the solution.
Congress has been debating three main options for ending surprise billing. Two would expand government’s role. The first would have Washington mandate a reimbursement price for out-of-network care; the second would force all doctors operating at an in-network facility to accept in-network prices.
Luckily, Cassidy is fighting a crusade for the third, market-centered option: what he calls a “baseball-style” independent arbitration system because it’s the same model used by Major League Baseball for salary negotiations. There’s nothing more American than baseball.
The process takes patients out of the middle of payment disputes by allowing providers and insurers to hash out their differences in front of an independent dispute resolution arbitrator. Regardless of the decision, the patient still only owes the in-network rate. The arbitrator’s role is to ensure that the market is respected and the patient is protected.
In states where an independent dispute resolution process already exists, it has proven to have a preventative effect: most cases are resolved before arbitration is necessary. When cases do go to arbitration, the decisions have been evenly split between insurers and providers. In other words, it’s a fair process with fair outcomes—outcomes that the patient never has to worry about.
Sen. Cassidy is in for a tough battle. Most Republicans and Democrats are leaning toward the option that delivers a bigger payday to insurance companies. Nonetheless, it’s a fight worth taking on. Independent dispute resolution would shine the light of market forces onto this shady corner of the health care industry, naturally driving down prices.
President Trump was right to draw attention to the problem of surprise billing. Obamacare did nothing to solve it, and now Republicans, particularly leaders in Congress, such as Kevin McCarthy and Cory Gardner, among other conservative champions on Capitol Hill, have a chance to fix the issue the small government way. It won’t solve our every health care challenge, but it would demonstrate to the American people that conservative health care solutions work—and in their favor.