Washington Examiner: Lower Costs and More Choice in the Healthcare System Require Competition
In recent years, the cost of healthcare has skyrocketed for working families around the country. Congress strove to bring down these sky-high costs by passing Obamacare, drug price controls, and billions in health insurance subsidies. However, none of these measures addresses the root cause of unaffordable healthcare: monopoly hospitals. Thankfully, lawmakers are starting to take decisive steps to inject desperately needed competition into our monopolized healthcare system.
In early March, Reps. Michael Burgess (R-TX) and Henry Cuellar (D-TX) introduced the Patient Access to Higher Quality Health Care Act of 2023, a bipartisan proposal to empower physicians to open new hospitals and offer patients a low-cost alternative to large hospital chains. In addition, the bill would empower the 250 existing physician-owned hospitals to add new departments, units, and beds to serve their communities better. This proposal mirrors a similar proposal introduced in the Senate by Sens. Bill Cassidy (R-LA) and James Lankford (R-OK).
Since 2010, a provision in Obamacare has prohibited physicians from opening new hospitals or expanding hospitals they already own. Lawmakers inserted this disastrous provision because of a concerted campaign from hospital lobbyists to ban highly skilled physicians from offering an affordable alternative to expensive hospital care.
As a result of the big hospitals’ anti-patient lobbying efforts, the ban imposed an immediate halt on the construction of high-quality hospitals. Several analyses by Physician Hospitals of America found that 75 new hospitals and 45 hospital expansion projects were terminated by this policy. Furthermore, this policy prevented 30,000 new healthcare jobs from opening across the country.
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Without meaningful competition from physicians, large hospital chains have merged with their competitors and monopolized the healthcare system throughout the United States. Since 1998, hospital groups have bought thousands of independent hospitals through nearly 1,600 hospital mergers. Today, 80% of hospital markets are considered by the Federal Trade Commission to be “highly concentrated.” As large hospitals dominate the health systems of communities, they have used their monopoly power to charge patients dramatically higher prices. A 2018 analysis by the University of California, Berkeley, found the price of hospital stays increases between 11% and 54% when hospitals merge. This translated into a $3,000 increase in the cost of care for the average patient.
Thankfully, Burgess and Cueller’s commonsense proposal would deliver desperately needed choice and competition for America’s patients. A system review of physician-owned hospitals by the Mercatus Center at George Mason University found that physician-owned hospitals charge significantly less than large hospital chains. For example, the review found that physician-owned hospitals charge 12% less for hip and knee replacements and 18% less for spinal surgery.
Physician-owned hospitals have also demonstrated they deliver higher quality care than conventional hospitals. Forty percent of physician-owned hospitals receive a five-star rating from the Centers for Medicare and Medicaid Services’ star ratings reviews, compared to just 5% of conventional hospitals. Patients are also three to five times more likely to suffer from complications at a traditional hospital compared to a physician-owned hospital.
A new public opinion survey conducted by YouGov for Americans for Prosperity found that 67% of voters are concerned about the growing consolidation of hospitals across the country. Seventy-two percent say hospital consolidation creates regional monopolies that keep prices high.
Ending the ban on physician-owned hospitals would bring down prices by making hospitals compete. It’s a critical step toward delivering a personal option in healthcare that gives the public the affordability, choice, and control they deserve.
Read the full article by Charlie Katebi from the Washington Examiner.