To: Alan J. Balch, PhD and CEO of Patient Advocacy Foundation From: Date: September 27, 2013 Re: Campaign for Patient Access to Health Care

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1 To: Alan J. Balch, PhD and CEO of Patient Advocacy Foundation From: Date: September 27, 2013 Re: Campaign for Patient Access to Health Care This year s Patient Congress in Washington D.C. missed an opportunity to debate the single-most important barrier to universal healthcare: cost. To address this issue, the Patient Advocacy Foundation (PAF) should promote legislation at next year s Congress that would require hospitals to publish how much more they charge the privately-insured than Medicare patients for the same services. The PAF should also invite 2016 presidential candidates to the Congress and extract campaign pledges from them to support hospital price transparency. Finding a presidential candidate to advocate price transparency is the best way to put patient welfare back on the legislative agenda in the next three years. When Congress passed and implemented the Affordable Care Act (ACA), the PAF scored a major victory in its pursuit of patient access to insurance and healthcare. However, its fidelity to issues of insurance coverage has left the Foundation fighting yesterday s battles. Since the 112 th Congress convened in 2010, the healthcare debate has shifted from issues of patient access to issues of cost. This has happened for two reasons. First, the ACA has made universal health insurance access fait accompli. Second, House Republicans have focused Congress s attention on the federal budget s bottom line by refusing to negotiate over the nation s borrowing limit. Hospital price transparency offers a path through D.C. s political gridlock because it proposes a bipartisan solution to the political problem of the day. The problem is mounting costs. Costs to the federal government concern Republicans, while costs to middle class patients concern Democrats. The solution proposes a database in each state that would publish how much more hospitals charge privately-insured patients than Medicare patients for the same 1

2 services. Price transparency will appeal to conservatives who value market forces and individual responsibility by empowering patients to selectively shop for the best healthcare prices in town. At the same time, price transparency addresses the PAF s progressive mission: it expands patient access to healthcare by driving down the costs of hospital services. Although Republican and Democratic legislators have proposed specific price transparency bills in the last few years, Congress is not poised to move on any one of them. The fall legislative calendar is packed tight with votes on a continuing resolution to fund the government and a raise of the debt ceiling. Both of these issues have immediate and hard deadlines that require quick resolutions. Since the benefits of price transparency will take years to manifest, this policy is not suited to either of these problems. The PAF should delay any campaign to advocate price transparency until Congress has breathing room to tackle long-term budgetary issues. The best political climate for pressing this policy will not arrive until after the 2016 presidential elections. At that time, the problem of costs will still dominate Congress s agenda, and price transparency will still offer an answer to the government s budgetary challenges. A new president will also have the political capital to invest in long-term solutions like hospital price transparency. Moreover, 2016 will usher the Obama administration out of the debate on healthcare. With the President s departure, many more conservatives and progressives will be willing to negotiate a compromise on a bill without worrying about the politics of supporting or opposing Mr. Obama s signature legislative achievement, the ACA. In order to sell hospital price transparency as a viable solution to the next president, the PAF needs to begin courting support for legislation at next year s Patient Congress. Waiting to see which candidate wins the election will allow too much time for other proposals to sweep in 2

3 and become the government s policy of choice. The PAF can turn price transparency into the solution for America s fiscal woes by organizing next year s Patient Congress as a campaign venue for 2016 presidential candidates. In exchange for a platform to address patient interest groups, candidates can pledge their support to transparent and intelligible hospital prices. Given Secretary Hillary Clinton s policy interests in healthcare, the PAF should make a special effort to recruit her to the conference. I am appending an op-ed that the PAF should publish ahead of next year s Patient Congress. Not only would it announce Ms. Clinton s participation in the conference, but it would also explain the relevancy of hospital price transparency to voters before the 2014 midterm elections. If voters, advocacy groups, and elected officials debate this issue in the midterms, it could help set the tone for debate over government costs in the 2016 presidential campaign. That debate, in turn, would help catapult hospital price transparency to the top of the next administration s agenda after the 2016 elections. 3

4 Healthcare, at What Price? Imagine walking up to the cash register at a Hershey bars and bags of Skittles $1.20 each. 20-ounce cokes $1.60 a bottle. Last week s sausage on the hot dog rotisserie $2.00 a link. Now imagine the same 7-11, only this time neither the candy, soda, sausage nor anything else has a price label. Welcome to the American Healthcare System: the store with no price tags. Tomorrow morning Hillary Clinton will speak at the 15 th Patient Congress in Washington D.C. The event this year focuses on how hospitals might make the prices they charge for all of their services available and intelligible to the public. Sounds pretty innocuous, right? Perhaps it would be, if your mom didn t face a $21,000 hospital bill for twenty tests and a flu shot in the emergency room. Perhaps it would be, if the United States didn t spend more on healthcare than the next ten biggest spenders combined. If you think your pocketbook and the nation s budget line are unrelated, just think about the 7-11 with no price tags. In an ordinary store you know an over-priced Hershey bar when you see it. There is probably a store down the street that offers the same chocolate for a few cents less. You have options, and you know those options before you show up at the store. More importantly, the 7-11 knows you have options, and if it wants to keep your business, it knows it will have to lower its prices. But the American healthcare system doesn t work that way. Most patients don t know how much a test or drug will cost them until the bill comes in the mail. Even then, the actual prices of each procedure are so complicated that you need a Rosetta Stone to decipher them. Besides, how many patients know the true cost of a chest X-ray or the latest anticoagulant drug? 4

5 Healthcare, it would seem, is destined to be a seller s market, where the American consumer is at the mercy of whatever secret price hospitals see fit to charge. Tomorrow, though, Ms. Clinton and the Patient Congress will begin to consider a solution that would arm patients with the only thing that can save them (and their wallets): meaningful information. The proposal would require all states to set up databases that show how much more hospitals charge the privately-insured than Medicare patients for the same service. Medicare s price, in other words, would become the standard by which all hospital prices are measured. Under this plan, not only would you know the price of that X-ray your daughter had on her leg, but you would also know how it compares to the price your hospital charges a 65- year-old man on Medicare. And so would your insurance company. In a life-or-death emergency, maybe you won t have time to compare the costs of one hospital to another. But what about the other times, when appointments are planned and scheduled? The Patient Congress is talking about transparency, and you should be to. As the election season accelerates into full gear, write to your member of Congress. Better yet, show up at her town hall meeting at your local library. Ask her whether she supports your right to know the true costs of your mom s and your daughter s healthcare before the bill comes in the mail. If price transparency is good enough for the American consumer, how can we demand less for the American patient? 5