Hospitals' and insurers' roles in the rising cost of healthcare took center stage during a high-profile U.S. House of Representatives hearing Tuesday on a single-payer system.
In a sign that industry jitters and strident healthcare lobbying may be justified, the House Rules Committee examined the chamber's Medicare for All legislation, and committee Chairman Rep. James McGovern (D-Mass.) declared that while critics decry the policy's projected price tag, "we're spending an awful lot on healthcare right now, and we're not getting the services and effectiveness that we're all demanding."
The House bill introduced by Rep. Pramila Jayapal (D-Wash.) proposes global budgets to distribute payments to hospitals, leaving lobbyists looking for clues on where lawmakers stand on leveling off reimbursements to current Medicare rates.
But the lawmakers and witnesses at Tuesday's hearing didn't focus concern on hospital margins—leaving the defense of the hospital position to Republican members of the committee.
Sara Collins, vice president of healthcare coverage and access at the Commonwealth Fund, made the provider rate the focal issue of her testimony, noting that finding the proper rate is one of the "critical design issues" of any public plan. She recommended that policymakers consider rolling out a public option in parts of the country with few insurance options to experiment with the proposal.
She also credited the various Medicare for All bills for shedding light on hospital charges and costs.
"A major contribution of the Medicare for All bills is to put out there how much we pay for providers now," Collins said. "It's a conversation we need to have right now."
And in one exchange, Rep. Donna Shalala (D-Fla.), a freshman in Congress but former HHS secretary under President Bill Clinton who hasn't thrown her support behind Medicare for All, stated that private insurers "have been less effective" than the government at controlling costs. This spurred Collins to criticize the leverage that hospitals in concentrated markets in particularly have to negotiate high reimbursement rates.
On the other side, Grace-Marie Turner, president of the conservative Galen Institute and outspoken opponent to a single-payer system, argued that universal adoption of Medicare rates would shutter hospitals.
Charles Blahous of the libertarian Mercatus Center at George Mason University, whose analysis last year of Sen. Bernie Sanders' (I-Vt.) Medicare for All bill predicted hospitals would bear most of the cost-cutting, declined to take a side on the merits of these cuts. Instead he noted that Congress has historically been loath to "impose significant cuts" on providers and he was skeptical they would be willing to do so when rolling out a single payer policy.
Yet Blahous also acknowledged that he found the myriad reimbursement rates from private insurers baffling and told the panel that while he noted discrepancies, he "fell well short of being able to explain" them.
Medicare for All is estimated to have a hefty pricetag. Dean Baker, senior economist at the Center for Economic and Policy Testing, projected the policy would cost the government $33.4 trillion over a decade, but he argued that savings on administrative costs would cut government costs by about $3.5 trillion over the same time period, and hospital costs as well.
He also criticized extra costs within the Medicare Advantage insurance market, which he characterized as costing the government 13% more than traditional Medicare. Ultimately he predicted that if a public option brings younger people under the government payment umbrella, hospitals, physicians and other clinicians would start to favor that market over commercial insurers.
The hearing was a victory for Jayapal, who launched a House Medicare for All Caucus last summer along with Rep. Debbie Dingell (D-Mich.). The two also led the reintroduction of the House bill, expanding the legislation to include long-term care and setting up the global budget model.
Among the witnesses was the last-minute addition of Ady Barkan, a 35-year-old activist who is dying of amyotrophic lateral sclerosis, or Lou Gehrig's disease. He had texted House Speaker Nancy Pelosi (D-Calif.) and came to testify, speaking through a machine as he is unable now to speak. Jayapal credited his presence as key to the tone of the hearing.
"Ady being there put that crisis in front of everybody for every question," she said, characterizing the event as a signal of "momentum."
But on the other side of the aisle, committee Ranking Member Rep. Tom Cole (R-Okla.) expressed skepticism for how far this proposal will go, particularly given the divide between Republicans and Democrats over coverage as exemplified by the Affordable Care Act.
"If the ACA were so great, we wouldn't be debating Medicare for All," he said. "That's a program where if you get a subsidy or have a pre-existing condition you are better off, but otherwise you're worse off. It's not a system that's worked well."
But he also got to the heart of most observers' skepticism: that Congress won't have the will to throw people off their employer-sponsored health plans.
"Number one, count me as skeptical that this would happen. It simply doesn't make sense, and the reaction to something like that would be overwhelming," he said. "There are only so many doctors and so many nurses, and when you're talking about putting people into the system without addressing those things, care will deteriorate."
Jayapal is well aware of this dynamic and on Tuesday acknowledged that the employer voices were missing. She said she wants to bring businesses that are in favor of a single-payer system into the next phase of the conversation.