Can things get worse than “worst”? Louisiana may be about to find out.
A report last year delivered sobering news: “Louisiana has the worst health care system in the country,” according to Jill Gonzalez of WalletHub. Given that analysis, it is tempting to assume that any action Washington takes is bound to help our state. After all, there is no other state to pass on the way down.
But that assumption contains a crucial misdiagnosis. The goal is not to “do something,” it is to “accomplish something” and make the health care situation — here and throughout the country — better. Unfortunately, the approach that Beltway lawmakers are considering would make things worse.
Congress is deliberating a bill called the Lower Health Care Costs Act. Lower costs are a good goal, of course, and there is a way to achieve them. However, this bill would not work. It attempts to reduce spending by imposing price controls that limit what providers may charge for health care, especially emergency care delivered by out-of-network providers.
This would improve the situation for big insurance companies by capping what they owe in such cases. They love the idea and are lobbying hard for it. On the surface, it looks like a great deal for patients in Louisiana, but it would be a disaster.
To understand why, consider something else that WalletHub’s Gonzalez said in her explanation: “The Medicaid acceptance rate among physicians in Louisiana is 54.2%, the third lowest in the country.” That highlights the nub of the problem, since Medicaid is a poster child for price controls.
Medicaid is the federal program that is supposed to provide health care to poor people. But in order to reduce costs, lawmakers often cap how much doctors may charge for new patients. This can lead to drastic cuts. For example, when a temporary increase in Medicaid reimbursement was set to expire in 2015, the Urban Institute estimated the action would lead to “an average 42.8% reduction in fees for primary care services for eligible providers.” If you cut what they may charge in half, it is no wonder that many doctors will stop seeing patients.
Another problem in Louisiana is a lack of providers, which (under the law of supply and demand) means people need to pay more for the providers that remain. Consequently, capping what these providers may charge is exactly the wrong approach. It will only force doctors to relocate to another state (where they can make a living) or leave the practice of medicine entirely. In fact, some are already making plans to do so. Almost half the doctors surveyed by the Physicians Foundation last year say they plan to change careers.
There is a better approach, and it is being offered by U.S. Sen. Bill Cassidy. A doctor himself, Cassidy is building bipartisan support for legislation to address surprise medical bills without imposing price controls. The “Stopping The Outrageous Practice of Surprise Medical Bills Act of 2019” would use the power of market pricing to control costs and improve care. One feature of the bill is that it provides a sensible method of arbitration to settle outstanding bills. Both parties would submit what they consider a fair price to a neutral arbitrator, who would then select either one or the other option. This creates price pressure on each side to be fair. The system works in New York and New Jersey and could improve pricing in our state as well.
A problem, in Louisiana and elsewhere, is too much intervention. “The government deserves much of the blame for doctors’ low morale,” health care analyst Sally Pipes wrote last year. “For years, the feds have cut their pay, meddled in their decisions, and subjected them to mountains of needless paperwork.”
The LHCC would make government intervention even more cumbersome. If it passes, be prepared to watch Louisiana’s bad situation become even worse.
Jeff Crouere is a political commentator on New Orleans radio and television.