Bipartisan Senate Bill Moves the Conversation Forward on Reducing Health Costs

There is perhaps no issue on Capitol Hill that is more often discussed these days than reducing health care costs. The Senate Health, Education, Labor, and Pensions (HELP) Committee will continue the conversation tomorrow with a hearing on the Lower Health Care Costs Act.

The discussion draft of the bill, released last month by HELP Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), covers a lot of topics: "surprise" medical bills, drug pricing and patent reform, the relationships between health insurers and providers, health data transparency, and other pressing public health concerns.

When consumers have more information about anticompetitive practices in health care, they are better equipped to shop for providers that offer quality care at a lower price. The Lower Health Care Costs Act starts the conversation around making health data more available to patients and plan sponsors, and we look forward to hearing what additional ideas lawmakers and witnesses bring to the table tomorrow. NTU believes that policy should be directed toward exposing these anticompetitive practices for consumers, rather than allowing government to have a heavy hand in policing them (which could reduce patient access to innovative services).

Congress needs to legislate carefully on this issue, and the committee exercised considerable judgment in presenting several options for resolving disputes over surprise bills between health insurers, practitioners, and health facilities.

Yet all three of the options currently under consideration by the committee carry some degree of risk. One is called the “Benchmark” option: the insurer’s payment rate for a surprise bill would be the median contracting rate for those services in a given geographic area. This option is concerning, given it would serve as a federally-mandated price control on disputes between private entities. A second option would provide for independent dispute resolution by a third party, but comes with its own concerns given that federal agencies would determine which third parties can mediate these disputes. A third option on the table, a guarantee that all health care practitioners at an in-network facility will be considered in-network for a patient and their health plan, could be disruptive to arrangements between health care providers and hospitals, especially those in underserved areas. It’s important that the HELP Committee addresses this challenging issue in a manner that protects consumers without impeding upon private parties.

NTU is also interested to hear witness perspectives on drug pricing and patent reform, and believes any proposals Congress considers should continue to strike a delicate balance between encouraging new drug discoveries and controlling costs. As NTU’s Pete Sepp put it in April, when discussing the 1984 Hatch-Waxman drug patent law:

Costly innovator drugs have been shown to reduce other expenses in government health programs over the long term, such as surgeries or long hospital stays. On the other hand, generics deliver massive savings over the nearer term to those same programs as well. No other country in the world can boast of such a successful policy environment that both encourages discoveries to reach patients (nearly 90 percent of newly launched drugs worldwide are available here) and controls costs (over 90 percent of prescriptions written in the U.S. are for generics). And the Hatch-Waxman law has had a great deal to do with this success.

All in all, the Lower Health Care Costs Act marks an important step forward in the ongoing conversation around reducing health care costs for Americans. NTU will be closely following its consideration by the Senate HELP Committee, and any changes to the bill both for better and for worse.