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This Week in Health Care Reform: November 22nd, 2019

Lawmakers work to reconcile competing proposals aimed at protecting consumers from surprise medical bills; meanwhile, astronomical charges for air ambulances underscores the imperative of finding a solution; a new report points to hospitals as being largely responsible for the rise in health care prices; and, how patients feel the pain of hospital-physician consolidation.

Week in Review

Surprise Billing Proposals: Key Congressional lawmakers have been steadily working behind-the-scenes for weeks to find a compromise between competing proposals targeting surprise medical bills.  For their part, voters, across party lines, overwhelmingly support legislation that would eliminate these bills and protect consumers from unexpected – and exorbitant – health care costs.  At issue, how best to end surprise medical billing, a practice that largely results when out-of-network emergency physicians and specialists bill patients directly for medical services received, often at in-network facilities.  As has been covered in previous Health Action Network newsletters, private equity firms and powerful provider groups, having identified a profitable business model, have worked diligently to protect this revenue stream, effectively complicating efforts to advance a pro-consumer solution by advocating on behalf of an arbitration-style model that experts maintain would only add administrative burdens and increased costs to the process.  Opponents, including health care economists, payers, employers, consumer groups, and unions, have thrown their support, instead, behind the median negotiated rate, which would pay out-of-network providers at the same rate for similar medical services in a geographic region.  While it remains to be seen which proposal is ultimately advanced, Congressional leaders continue their efforts to work out the differences between the measures.

Air Ambulance Charges: As stakeholders take a closer look at who’s responsible for driving surprise medical bills, increased focus has been paid to the astronomical charges associated with air ambulances.  Egregious examples abound, such as the recent story of one patient who was billed more for the 27-mile air ambulance flight than the lifesaving, double lung transplant he was being airlifted to.  Unsurprisingly, the profitability of these emergency services has attracted the attention of private equity firms, whose investment has only served to exacerbate the issue.  In fact, a recent analysis shows that, despite a decline in their use and frequency, the cost of an air ambulance trip is high and rising, more than doubling between 2008 and 2017.  Over that ten-year period, the average price associated with an air emergency trip rose 144 percent (for helicopters) and 166 percent (for planes).

Hospital Prices: But, it’s not just air ambulances that are overwhelming consumers with surprise medical bills.  The prices for emergency medicine and anesthesiology services in hospitals, two of the most common sources of surprise medical bills, have also increased significantly in recent years according to research published in JAMA Internal Medicine, driving up health care costs for everyone.  Specifically, the so-called sticker prices for these two services have gone up annually, from 2012 to 2016 – 28 percent for emergency services and 32 percent for anesthesiology.  Even more worrisome, as pointed out by the study’s authors, is that the incidence of emergency department surprise medical bills has increased by as much as 43 percent between 2010 and 2016, which has led to greater patient financial liability.  The impact of these increases was highlighted in the latest Health Sector Economic Indicators brief from health care research and consulting group, Altarum, which showed a surge in health care price growth, attributable to the jump in hospital prices.  According to their analysis, annual growth in their Health Care Price Index (HCPI) was measured at 2.0 percent, the highest reading since June of 2018.  That was driven primarily by annual hospital price growth, which, at 2.8 percent, represented its highest rate since March of 2013

Finally, despite the rhetoric advanced by large hospital systems in defense of their acquisition and consolidation of smaller, physician-owned practices, a recent study found that consumers wound up paying significantly more for care provided by those hospital-owned practices.  Published in the Journal of General Internal Medicine, researchers estimate that patients pay about $280 more than they otherwise would.  Further, when comparing annual spending per patient at a hospital-owned practice versus an independent one, researchers found that spending was 5.8 percent higher.  A separate analysis by the Medicare Payment Advisory Commission (MedPAC) underscores just how pervasive the issue has become, with the share of physicians employed by hospitals having jumped from approximately one-quarter (26 percent) in 2012 to approaching half (44 percent) last year.      

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The latest “Health at a Glance 2019” from OECD Publishing, takes a look at health indicators and system performance metrics across OECD (Organization for Economic Co-operation and Development) countries, candidates, and partner countries.

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