Joe Biden's inexorable march toward the fanatical left continued this week, as he and Bernie Sanders…
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Biden Drug Plan Would Slash Innovation and U.S. Consumer Access

Joe Biden's inexorable march toward the fanatical left continued this week, as he and Bernie Sanders (D - Vermont) introduced their "unity platform" in anticipation of this year's Democratic convention.  We can thus add weaker U.S. patents and drug price controls imported from foreign nations to Biden's existing dumpster fire of bad ideas.

Here's the problem.  As we've often emphasized, and contrary to persistent myth, American consumers enjoy far greater access to new lifesaving drugs than people in other nations, including those in "other advanced economies" (Biden's words) whose price controls Biden seeks to import:

Of all new cancer drugs developed worldwide between 2011 and 2018, 96% were available to American consumers.  Meanwhile, only 56% of those drugs became available in Canada…[more]

July 10, 2020 • 04:52 PM

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Surprise Medical Billing: Sticking It to Healthcare Professionals Is the Wrong Approach, Especially Amid a Pandemic Print
By Timothy H. Lee
Thursday, April 30 2020
Rate-setting and price controls are always bad ideas, and should be avoided completely as a “fix” for surprise medical billing. But that's especially true today, which is the worst possible time to mandate a counterproductive rate-setting scheme that would particularly undermine the vital healthcare professionals fighting this pandemic on the front lines.

Surprise medical billing was already a pressing policy matter in the months leading into the coronavirus pandemic. 

The issue, however, has acquired significant new salience due to the increased uncertainty and financial concerns triggered by the pandemic and economic aftershocks. 

As we battle the pandemic and pursue a lasting solution to surprise medical billing, it’s therefore critical that Congress not veer from a proven policy that is already working at the state level to favor alternative bureaucratic, price-control measures being pushed by some in Congress that have already proven disastrous. 

And Congress certainly shouldn’t act in haste to do so in the middle of a pandemic.

For anyone unfamiliar, “surprise medical billing” refers to when patients receive bills for medical care from physicians or hospitals that they had assumed were covered within their insurers’ networks, but were in fact outside their coverage.  Most commonly, patients attempted to seek care from medical providers within their insurance network, but in the course of their treatment unknowingly received out-of-network care.  For example, imagine specific laboratory work or x-rays performed by out-of-network specialists as part of a broader course of treatment.  Consequently, patients are later hit with high, unexpected bills seeking payment for the costs not covered by their insurance through no fault of their own. 

For obvious reasons, that was already a stubborn problem that Congress was attempting to resolve. 

Unfortunately, a positive approach that is working in states like New York is being overshadowed by Congressional calls to impose a dangerous, bureaucratic rate-setting approach that would harm doctors and other healthcare professionals fighting on the front lines of the pandemic. 

The optimal solution to surprise medical billing implements what’s known as Independent Dispute Resolution (IDR), a form of arbitration that allows insurers and medical providers to cooperatively negotiate settlement of out-of-network repayments on an individualized, case-by-case basis through a neutral, independent arbitrator. 

That market-based IDR approach has already proven successful in states like New York and others, because it doesn’t unfairly favor one party or another, but instead allows patients, medical providers and insurers to negotiate a fair solution. That protects patients from crippling surprise medical bills, but still maintains the viability of our healthcare system.  Since New York passed its IDR solution in 2015, it has experienced lower out-of-network bills, higher network participation and greater transparency from insurers. 

The alternative approach would counterproductively employ rate-setting and sclerotic bureaucracy in a way that would only make matters worse. 

A proposal being pushed hard by Senator Lamar Alexander (R - Tennessee) and Representative Greg Walden (R-Oregon), among others, would empower the federal government to dictate rates for out-of-network care on the basis of insurers’ in-network repayment averages.  In other words, price controls dictated by one participant in the surprise medical billing interrelationship.  Obviously, that approach would tip the scales in favor of insurers over medical providers by allowing them to reduce repayment rates and thereby shift crippling financial losses to local healthcare facilities. 

As a more practical matter, government rate-setting and price controls never work as intended and invariably lead to shortages and less innovation, two of the last things we need less of right now as the coronavirus pandemic lingers.  That grim prospect was emphasized by more than 160 economists who signed a letter sent to Congress this week warning against rate-setting:

[W]e are opposed to the enactment of price controls that would peg provider reimbursement to a “benchmark” rate picked by the federal government. Such proposals represent a direct government intervention in health care that would hurt access to care, especially for patients in rural areas.
 
No matter the policy area, government price controls often result in shortages and market distortions. These outcomes should be avoided, especially when dealing with important health care services like emergency room visits and physician care. 

As Taxpayers Protection Alliance president David Williams added:

As pointed out by the economists in the letter, federal price controls always result in failure. From Medicare’s failed ‘wage index’ experiment to the Indian Health Service’s byzantine pricing structures, patients have seen these price controls (and the ensuing chaos for patients and doctors) across the entire healthcare sector. … Clearly, the government has an abysmal track-record in dictating pricing and quality of care in the healthcare sector. But lawmakers have not learned their lesson from these cautionary tales, and instead are keen on doubling-down on healthcare price-fixing. Hopefully, members of Congress will listen to the experts and economists this time and reject rate-setting.

The issue of surprise medical bills demands a fair, effective solution, and the coronavirus pandemic demands a strong, unified, effective response.  We cannot, however, allow haste to facilitate a “solution” that makes matters worse. 

Rate-setting and price controls are always bad ideas, and should be avoided completely as a “fix” for surprise medical billing. But that's especially true today, which is the worst possible time to mandate a counterproductive rate-setting scheme that would particularly undermine the vital healthcare professionals fighting this pandemic on the front lines. 

The answer to both the coronavirus pandemic and the surprise medical billing problem is an approach that relies on market incentives, not heavy bureaucracy or price controls. 

Question of the Week   
In which one of the following years was the National Park Service established?
More Questions
Quote of the Day   
 
"The only people who might better know the streets of urban America than the cops who patrol them are the crooks who haunt them. What can the criminals tell us now about the state of our cities? The crooks know that the streets and alleys are being returned to them and that the police are in retreat. That is unmistakably the case as crime, particularly violent crime, is exploding all over urban America…[more]
 
 
—George J. Terwilliger, III, Esq., Former U.S. Justice Department Attorney, Deputy Attorney General and Acting Attorney General
— George J. Terwilliger, III, Esq., Former U.S. Justice Department Attorney, Deputy Attorney General and Acting Attorney General
 
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