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This Week in Health Care Reform: July 26th, 2019

A costly last-minute addition finds its way into surprise medical billing legislation; hospital and health system mergers near historic levels; ER visits found to cost significantly more than visits to doctors’ offices; and, barriers continue to hamper the digital revolution reshaping our health care delivery model.

Week in Review

Costly Arbitration: As covered last week, lawmakers in the House Energy & Commerce Committee advanced legislation aimed at protecting consumers from the scourge of surprise medical bills.  While the bill, as originally proposed, was widely supported, the last-minute inclusion of an arbitration-style model to resolve disputes was less well-received, with experts warning that such an inclusion would only lead to much higher costs and increased deficits.  In fact, most health economists and budget deficit experts have argued that arbitration is biased towards inflating health care prices to the benefit of providers, pointing to recent field experience in the states.  Practically speaking, stakeholders worry that the Energy & Commerce Committee bill, as now comprised, no longer reconciles with the primary legislation making its way through the Senate, which, earlier this summer, was approved by the Health, Education, Labor, and Pensions (HELP) Committee.

M&A on the Rise: Mergers and acquisitions (M&A) continue to prove an attractive strategy for providers and hospitals, as they look to capitalize on changing market dynamics by spreading risk and leveraging scope and market penetration.  By one measure, these megamergers have pushed M&A activity to near-historic levels, as evidenced by the amount of revenue being tied up in such deals in the second quarter of this year equaling nearly four times the amount over the same period the previous year.  Unfortunately, evidence has shown that this trend towards consolidation has resulted in health systems wielding extraordinary monopoly powers, which they’ve then used to extract lucrative contracts from insurers.  To the further detriment of consumers, this consolidation has already begun to upend traditional health care service models, as hospitals increasingly embrace specialization, while centralizing other functions at higher-traffic facilities in an effort to cut costs on equipment, space, and staff.

ER Visits: According to a new study, more than $30 billion per year is wasted on emergency room (ER) care that could be better delivered in a primary care setting.  Further, about two-thirds of ER visits are avoidable entirely, with those visits costing the health care system an average of more than $2,00012 times higher than visiting a physician office and 10 times higher than the price of visiting an urgent care center

Telehealth Barriers:
Despite the myriad advances made in the digital health space, institutional and regulatory challenges continue to impede the wider application of technology in health care delivery.  For instance, a recent study found that private practices lag behind their peers in other care settings (e.g., hospitals or group practices) when it comes to investing in – and maintaining – electronic health records.  According to that analysis, 49 percent of independent physicians attest to meaningful use of the technology.  Comparatively, 70 percent of physicians belonging to group practices or hospitals were able to make that same attestation.  Separately, a new report details the barriers that remain at the state-level hindering broader use of telehealth services, like remote patient monitoring (RPM).  While more states are covering RPM, the conditions under which the practice is covered varies, limiting coverage to patients with specific conditions or diseases.  The report also highlights other barriers, including state requirements governing distance and staffing, which continue to frustrate the expanded utilization of telehealth.      

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We encourage you to stay involved as implementation efforts surrounding health care reform progress.  Visit the Health Action Network and be sure to let us know what's on your mind.



Last week, we asked our Health Action Network members to reach out to their members of Congress to urge them to support surprise medical billing legislation that protects consumers by opposing the inclusion of arbitration into any proposals up for consideration.  Thanks to all of you who immediately took up the call, sending hundreds of letters to lawmakers.  For those that haven’t, we still need you to raise your voice and lend your energies to the effort to protect consumers from surprise medical bills and rising health care costs. 

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