If the insurance commissioner, business owners, consumer advocates, doctors, nurses and hospitals are all singing the same tune, government ought to listen up. But Washington House Bill 2572, which was backed by the governor and has passed the House, has fallen on deaf ears in the Senate.
The bill has several components aimed at cutting health care costs, but the controversy swirls mostly around the issue of making it mandatory to report all health care claims to a statewide database. The purpose is to provide price transparency and information on quality, so those paying for health services can make more informed choices.
As Rep. Eileen Cody, chairwoman of the House Health Care and Wellness Committee, said, “It doesn’t matter if you’re buying a loaf of bread or a new car or bypass surgery – consumers should have access to critical information on quality and price before they make a purchase.”
But Sen. Randi Becker, chairwoman of the Senate Health Care Committee, is more amenable to the wishes of Premera Blue Cross, which has quietly lobbied against the bill. She stripped out transparent pricing and sent the bill to the Ways and Means Committee.
Premera says its rates are “proprietary” and that reporting would be “complicated, potentially expensive and time consuming.” This is not a persuasive explanation for why health care purchases must be done blind. And Premera is virtually alone in taking this position. Price information is critical to efficient marketplaces. Consumers don’t have to sign on the dotted line before learning the cost of a car, but that’s often the case in health care. As a result, prices for identical tests and treatments fluctuate wildly.
The state has won a $3.4 million grant to build a database, but reporting is voluntary. Consumers will not see the full picture. HB 2572 called for mandatory reporting, but Becker gutted that provision.
The National Federation of Independent Businesses was among the most adamant advocates for the bill, saying business owners are tired of insurance-carrier concerns trumping theirs. The state is also a large purchaser of health care services and can’t afford to skip this opportunity for savings, especially as it struggles to meet the education spending mandates of the McCleary decision.
At least ten states have mandatory databases up and running, and the potential pitfalls referenced by Premera haven’t arisen.
The rest of the bill targets the payment model that has resulted in runaway health care costs. Insurers such as Group Health and Molina, and hospital systems such as Providence, are on board. The goal is to save an estimated $730 million over three to five years by phasing out the fee-for-service system and implementing alternatives with smarter incentives.
The biggest failing of national health care reform was its meager measures to control costs. Now that states are taking the lead, obstructionists should get out of the way.