Doctors Win Again, in Cautionary Tale for Democrats

December 19, 2019

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Source: The New York Times, by Margot Sanger-Katz

Democratic voters eager to see “Medicare for all” or some other major health overhaul pass the next time they control the White House may want to take a close look at what happened this week in Congress.

Leaders from both parties had unveiled legislation to stop surprise medical bills, the often exorbitant bills faced by patients when they go to a hospital that takes their insurance but are treated by a doctor who does not. The White House and major consumer groups had also endorsed the plan, which was to be included in the year-end spending bill.

But to the negotiators’ consternation, the spending package that emerged on Monday — and was passed on Tuesday by the House — had nothing about surprise bills. The proposal’s apparent demise was not a result of partisan division, but instead reflected certain lawmakers’ reluctance to pursue an approach that would reduce doctors’ pay. Several of the key lawmakers who scuttled the deal were Democrats.

In many ways, the debate over surprise bills is a miniature version of the coming fight over major health reform. The kinds of big plans that Democratic presidential candidates are pitching combine consumer protections — lower premiums, lower deductibles, more benefits — with lower pay to medical professionals. The surprise billing legislative package has this mix, too. It would protect patients from receiving surprise bills from doctors, but it would most likely result in pay cuts for certain doctors.

Medicare for all, which Bernie Sanders and Elizabeth Warren have championed on the campaign trail, would offer all Americans generous government-run insurance, while sharply reducing pay to doctors, hospitals and pharmaceutical companies. Plans from other candidates, including Joe Biden and Pete Buttigieg, would set up a “public option,” a government health plan that individuals could buy. That plan would also pay doctors and hospitals less than they earn now.

Both Democratic approaches poll fairly well. But a policy to end surprise medical billing, a smaller endeavor, polls even better, and it has emerged as a top voter concern. In a recent survey from the Kaiser Family Foundation, 78 percent of adults said they wanted the surprise billing problem fixed, and 57 percent said they would still support a solution even if it meant lower pay for health care providers.

Health care providers, of course, do not want their pay to be lowered.

When the legislative process heated up this summer, so did a fierce lobbying effort from doctors and hospitals. Doctor Patient Unity, a dark money group funded by two large private- equity-funded physician staffing companies, spent tens of millions on television advertisements and direct mail, urging lawmakers to oppose the bill. Lobbyists for doctors, hospitals, air ambulance companies and private equity funds also began making the rounds. Doctors have argued for a different solution to the surprise billing problem that would not cut their pay.

Research has shown that a small minority of doctors send surprise bills, and they are clustered in a handful of specialties where patients cannot choose their own doctor, including emergency medicine and anesthesiology. But the ability to send surprise bills affects the negotiating dynamics between that subset of doctors and insurance companies.

The surprise billing legislation in the recent deal would set a default payment to doctors for situations in which they were not in an insurance network, with the ability to appeal larger bills to an independent arbitrator. According to the Congressional Budget Office, the approach would tend to lower pay for doctors in those specialties by an average of 15 percent to 20 percent, because it would shift negotiating leverage in favor of insurers.

Although most lawmakers who have written legislation on the issue endorsed the proposal, a few did not. The bipartisan leaders of the House Ways and Means Committee said last week that they hoped to introduce a competing bill in the future, and released a one-page paper last week describing a framework that is more aligned with the preferences of doctors’ groups.

In a final meeting last week, leaders in the House and the Senate met to decide what legislation would end up in the year-end spending bill. Surprise medical billing didn’t make the cut. Several people close to the negotiations said it did not have strong enough support from the Democratic leadership.

The repeal of taxes that hit the medical device and health insurance industries, on the other hand, were included.

“When you’re going into a world when Democrats actually want to push things that special interests do not want, not getting surprise bills done does not bode well,” said Shawn Gremminger, a lobbyist for the consumer group Families USA, who described surprise medical bills as the “most obvious market failure” in health care. “We couldn’t even get that done.”

Some advocates remain hopeful. The spending deal has several health care provisions set to expire next May. That deadline may provide an opportunity for lawmakers to try again, and some time to build consensus between the authors of the recent deal and more skeptical lawmakers.

Greg Walden of Oregon, a Republican and the ranking member of the House Energy and Commerce Committee, said he was “disappointed” that the bill did not advance. “But I’m not dejected, and I’m not throwing in the towel,” he said. “It was the first locomotive to leave the station, but it will not be the last.”

But that optimism is not universal among the people who worked on the abandoned legislation.

Compared with Medicare for all, surprise billing would seem to have certain political advantages. For one, it targets only certain sectors of the health care industry. Medical specialty groups, private equity firms and hospitals disliked the bill, but insurance companies and large employer groups fought for its passage. They, too, spent millions on ads and lobbying.

The insurance industry would not treat a large expansion of public insurance coverage so kindly. And the pharmaceutical industry, another deep-pocketed health lobby that would fight the health plans from the main Democratic presidential contenders, had nothing to say about surprise bills. Even among doctors, there were many specialties that were unaffected; they also stayed quiet.

The surprise billing legislation had another crucial political ally that the proposed Democratic overhaul efforts won’t: Republicans.


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