The outbreak of COVID-19 is putting a spotlight on healthcare in the United States.
In recent months, many people avoided going to the doctor or postponed necessary care to avoid coming into contact with the virus.
But as the economy opens back up and people start seeking medical care once again, we must be careful not to leap back into the same stale debates many people were having before the pandemic. We can all agree that everyone needs to be able to access healthcare.
However, it’s important to note that price controls from Washington will only make it more difficult, not easier, to get healthcare. And yet, price controls are exactly what some are offering.
The problem these old Washington hands say they want to solve is “surprise medical billing.”
Say you have insurance and go to the ER on a weekend for an injury. The doctor you see may not be “in network.” You don’t really control this, but when it happens, you may get hit with a big medical bill a few months later, if your insurance company refuses to pay more than its in-network rate.
That’s unfair, but the cure shouldn’t be worse than the disease.
Retiring Sen. Lamar Alexander (R-Tenn.) is pushing for a bill that he says would solve this problem, but it would effectively do so by imposing federal price controls. That’s basically the same as Medicare for All.
If Washington caps what doctors may charge, it will end up forcing some to seek employment in other fields. If being an investment banker pays more than being a doctor, many intelligent physicians are going to make that jump. Many already have.
A better approach would be to set fair prices in the first place. In the small subset of cases where there is a dispute between providers and insurance providers, then doctors could name one price, and insurance companies another. An impartial arbiter would then select one or the other based on market conditions.
Both sides would want to be fair, since the arbiter would be likely to reject prices that were too high or two low. Patients would benefit by not being caught in the middle, and as they always do when there is competition in a market. That’s why the free market, and not government, is best suited to deliver quality healthcare.
On the other side of the coin, the federal government has a lengthy history of interfering in healthcare. When it does, it tends to make the problems it seeks to solve even worse.
Consider the problem of opioid abuse. Economist Casey Mulligan writes that: “In the early 2000s, the federal government began imposing substantial financial penalties on hospitals and physicians seen as inadequately treating patient pain.
As one study noted, this left ‘well-meaning professionals with the unsavory choice of prescribing opioids or facing dissatisfaction from disappointed patients.’”
Doctors responded to that federal intervention by over prescribing opioids, and we’ve been dealing with the fallout ever since.
When it comes to surprise billing, the Coalition Against Rate Setting warns that: “Mandating in-network rates would result in direct government price controls that would artificially suppress rates for providers offering out-of-network care, resulting in enormous financial losses that would be shifted to local hospitals and emergency rooms.”
This could leave patients much worse off, with fewer options and, eventually, higher costs.
Federal intervention through the Affordable Care Act has already led to a systematic narrowing of insurance networks. That’s a key reason so many patients are receiving surprise medical bills. Price fixing would only make the matter worse.
Our country will overcome COVID-19, and our healthcare system has a big role to play.
Policymakers should act to protect that system, not crush it under pointless price controls that won’t work and will endanger everyone who needs care.