The Senate HELP Committee proposed health care legislation today that is a step in the right direction to protect Americans from medical providers who impose enormous bills on patients without their prior knowledge and consent. Hospitals have control over choosing ancillary providers--such as anesthesiologists and pathologists--who treat patients, so the committee is right to make hospitals responsible for ensuring that they are in patients’ networks. The Senate approach is encouraging because it fixes a market failure by aligning incentives so that markets can work freely and competitively, instead of using government price-fixing. The House would be smart to follow suit.
While this addresses the problem of out-of-network medical providers practicing at in-network hospitals, it does not resolve the problem of surprise bills resulting from patients receiving emergency care at hospitals that are themselves out of network. This is a trickier problem, and both chambers should take more time to consider the sweeping unintended consequences that would likely result. Any price floor could easily be broadened over time to impede competition, which encourages providers to game the system and drive up the cost of health care.
- The Perils of Fixing Out-of-Network Health Care Prices (Economics21)
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