President Trump and congressional committees pushing to lower the costs of medical services and drugs without nationalizing health care are facing headwinds from industry. They need strong public support in order to make progress.
South Carolinians, and all Americans, should be concerned.
South Carolina health insurance premiums this year increased by 5.6 percent, well above wage gains, whereas in North Carolina and Tennessee the average premium cost fell. Over the years since Obamacare was enacted, South Carolina premium costs have risen faster than the national average of 5 percent a year.
Meanwhile, the percentage of South Carolinians without health insurance, at 11 percent, is significantly higher than the national average of 8.7 percent. People without health insurance must be treated; their costs are mostly passed along to the government and other health care policyholders. A major reason for lack of coverage is the high cost of insurance.
The drive for greater clarity in health care pricing is an important step toward making it possible for health care consumers and their insurance companies to make smart choices. That should lead to better care at more reasonable prices.
Many studies have shown that there is a fairly large range in what hospitals around the country charge for major procedures, and some hospitals, like the Mayo Clinic, offer a way for prospective patients to estimate their costs.
But like the problem of surprise medical bills, which is the subject of a bipartisan Senate bill, the health care industry has many institutions that don’t publish prices. The consumer is left in the dark until the bill arrives.
Surprise medical bills occur when a patient is provided services by a doctor or doctors not part of the patient’s insurance plan. The outside provider is not bound by a contract and can charge whatever he or she wants. The Senate legislation would place limits on such charges.
An executive order issued by Mr. Trump in June authorizes the Department of Heath and Human Services to require insurers and hospitals to disclose rates they have negotiated for common procedures and treatments, known as “shoppable” services. HHS has until the end of August to publish the regulations.
One argument against this approach is that prices will average out, raising the costs of some insured while lowering the costs of others and angering them. But publicizing prices also means hospitals and other providers will have to begin to compete on prices or conspire illegally to fix prices. That will introduce verifiable market discipline where little exists
Mr. Trump also issued an order requiring drug manufacturers to pass on to Medicare patients the rebates they offer to drug middlemen. Theoretically, this should benefit both Medicare patients and the government. But the threat from drug manufacturers to eliminate rebates forced Mr. Trump to cancel the order.
Drug manufacturers also won a suit blocking the administration from requiring them to publish drug prices in their television and print advertisements.
Amid these setbacks, a major backlash could be coming. House Democrats are pushing a bill to require drug manufacturers to negotiate prices of drugs purchased through Medicare with the government, something current law prohibits. Details of the bill are not yet public.
This long-time Democratic priority normally would face solid Republican opposition. But the heightened public interest in containing health care costs and the coming contest for Congress and the White House could change that. President Trump should help shape a bipartisan proposal Republicans could support. It would be a much-needed win for both sides and for consumers.