BUCHANAN: Save Healthcare from Big Government Know-it-Alls

Are you worried that you may face a medical emergency and be hit with a big surprise bill from an out-of-network provider? Maybe you shouldn’t be concerned. If Presidential contender and self-avowed Socialist Bernie Sanders has his way, bills will soon disappear.

The Democrat, who nearly became the party’s nominee in 2016 and is a top choice among liberals for next year, has already unveiled plans to spend more than $48 trillion to eliminate student debt and battle against climate change. Now Sanders aims to “release a new proposal to cancel $81 billion worth of medical debt Americans are struggling to pay off,” according to the Washington Post.

Great, if your country happens to have a spare $80 billion or so sitting around.

I jest, because of course the United States didn’t have that kind of money available when I was Treasurer in the 1980s and tax revenues were pouring in. These days, money is tighter. Congress is already spending $1 trillion per year more than the country takes, and the federal budget deficit is already more than $20 trillion. There simply isn’t any money to spend on big government programs.

To be fair, it’s easy to mock Sanders and his big government approach to every social ill. This is the man, after all, who once told CNBC: “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers.” He would presumably use Washington’s power to reduce consumer choices in health care as well as deodorants.

However, it’s less funny when Republicans want to use the power of the federal government in an ill-fated attempt to eliminate big medical bills.

When it returns from a month-long break, Congress may take up S.1895, a bill called the “Lower Health Care Costs Act.” It’s sponsored by Republican Lamar Alexander of Tennessee, himself a former presidential aspirant. Lower health care costs would be a great goal. But the bill goes about things the wrong way, by empowering government and insurance companies instead of people.

Alexander’s proposal would mandate that health-care providers set a “median in-network rate” for services. That rate would be based on the comparable Medicare (another big government attempt to solve health care costs) rates. It wouldn’t matter whether the recipients are in-network or out-of-network; the price would be controlled.

The problem is that price controls never work. Instead, they always lead to shortages. In this case, the price controls would cap the amount that doctors could be paid. Some providers would leave medicine, leading to a shortage. Patients would face longer wait times and have fewer skilled providers available. That’s not exactly what Americans are clamoring for in the 2020 presidential race.

Meanwhile, insurance companies love this idea. They would start with the new median price, and then start squeezing doctors and hospitals from there. They would offer lower and lower payments as they kept raised premiums for patients. They’d stand to make more money and face less competition as hospitals disappear.

The correct way to deal with the problem of surprise health care bills is by encouraging competition, which tends to drive down prices.

For example, a bipartisan bill sponsored by Sen. Bill Cassidy of Louisiana and Sen. Maggie Hassan of New Hampshire would be a much better option. Their bill, the “Stopping The Outrageous Practice of Surprise Medical Bills Act,” would, among other steps, apply price arbitration to settle health care bills.

Arbitration means that when there’s a price dispute, for example over the cost of out-of-network care, the hospital would submit a number that it considers fair and the insurance company would submit a number that it considers fair. An independent arbiter would choose one number or the other. Both sides would have an incentive to be reasonable, and the patient would benefit. The process is already working in New York state, and deserves a trial nationwide.

Americans need more health care choices, not fewer. Sen. Sanders wants to hobble our successful medical system by imposing price controls and eliminating price discipline. Mitch McConnell and the rest of Congress should refuse to go along. Instead, lawmakers should take sensible actions that can lower costs in the long term and improve the system for everyone.

Bay Buchanan is a former U.S. Treasurer under President Ronald Reagan.