Opinion

Two Ways Congress Is Failing Health Care Providers

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Posted: Apr 27, 2020 12:04 PM
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Two Ways Congress Is Failing Health Care Providers

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One of the enduring images of 9/11 will always be of the firefighters who ran into the burning buildings to save people. Similarly, America’s response to the current COVID-19 pandemic will always be remembered for doctors and nurses running into hospitals to help do the same.

Ordinary people across the country also show the great spirit of America as they find ways to express their appreciation for these health care providers, often by donating food or other provisions, sometimes with a morale-boosting nightly cheer from neighbors showing appreciation

These simple examples are terrific, especially as they have spawned organically from local communities.  However, physicians and others need much more help. In terms of public policy, lawmakers need to also step up.

At the federal level, Congress is falling short in two extremely consequential ways.  The first is in the refusal to abandon harmful price controls under the guise of addressing surprise medical billing.  The second is in ignoring the other crisis brought on by the pandemic response: the stagnation in non-pandemic related health care and its effect on providers and the system overall.

Surprise billing is a problem that will continue to grow.  Patients often receive care for unscheduled or emergency services from out-of-network providers that their insurance companies choose not to pay or negotiate ahead of time—unbeknownst to the patients.  Most patients are led to believe that tests, treatments, medications, or doctor services will be covered by their insurance company, only to find a bill waiting for them later.  Given the ongoing rise in costs in large part due to Obamacare, the surprise is dreadful indeed.

Many Doctors support a federal solution that would provide a framework where they can negotiate with insurance companies—a solution that is already working at the state level.

Some elected officials, however, blame the doctors instead.  Rep. Greg Walden (R-OR) has been a staunch proponent of giving all of the market leverage to the insurance companies.  Walden has gone so far as to strongly suggest that doctors are price gouging, which is not a good look, especially when combined with a legislative proposal that gifts insurance companies a huge windfall, as if the billions of dollars that ObamaCare handed to them weren’t enough.

What’s more, tipping the law even more toward insurance companies would cause a doctor-payment death spiral. Insurance companies would have no incentive to renew contracts for doctors being paid above in-network rates. And as the process continued, prices would continue to decrease. Insurance profits would not face the same pressures, though, so patients would have no guarantee of realizing any of the savings. But as doctors are paid less—and, therefore, work less—patients would also have less access.

The second major threat to access that Congress is not addressing properly deals with the treatment of independent practices and others who are outside of the parameters for federal aid outlined in the recent relief bills.

An effect of the shutdown status and postponement of elective and non-emergency procedures is that these professionals and practices are suddenly under financial strain that threatens their future.  While certainly unintended, it is a situation that does not bode well for patient access and health care prices.

Bob Doherty of the American College of Physicians was recently quoted saying that "the economic pressures on physicians, especially small practices, are so severe right now that their survivability is in question.  Unless the financial situation improves, within the next several months, many are going to have to shutter or sell out."  That same report cites a fall in revenue between 50 percent to 90 percent. 

The Wall Street Journal also editorialized about the upheaval, which indicates that the medium and long-term consequences go beyond income for medical practices: “Some doctors are pausing chemotherapy treatments for less aggressive cancers due to government recommendations but also to avoid suppressing patient immune systems. Preventive screenings including mammograms, colonoscopies and melanoma checks have been cancelled.”

One immediate effect is that this month 1.5 million “non-essential” health-care workers will lose their jobs, according to Oxford Economics, a firm specializing in global forecasting and quantitative analysis.

If the threat to independent medical practices continues unchecked, it will lead to one of two options for these offices and facilities and their employees.  The first would be to close for good.  The second would be to sell, almost certainly to large hospitals, insurance companies, or private equity firms, who are likely to consolidate most of the practices.

There is strong evidence that when independent practices are acquired or offices close, prices spike significantly due to a lack of competition.  Either way, the results for patients are bad.

This dynamic has been left unaddressed by the recent relief legislation.  If Congress determines a need for another bill, it would be wise to take a serious look, especially when many institutions who are much better off financially are receiving huge amounts of taxpayer support.

The country is stepping up to support first responders and medical professionals on the front line of the pandemic fight, as it should.  But the consequences of both undermining doctors who care for us in other areas—either through harmful price controls or sheer legislative negligence, are threats that should be taken as seriously as the fight against the coronavirus itself.