Peter Schorsch
Rick Scott is at it again, calling for more government meddling in health care, by featuring a plan for government-regulated prices on inpatient admissions, outpatient visits and other medical procedures.
Scott may have consistently paid lip service to the idea of free-market competition, but in 2016, he has renewed a push for legislation that, if passed, could lead to “competition-killing price caps” on Florida hospitals.
Coincidentally, the new effort comes just as the governor visits Washington, D.C., this week to give a speech at the American Enterprise Institute, a private, nonpartisan, not-for-profit think tank. Scott’s visit, scheduled for noon Thursday, is themed on the politically expedient banner of “transparency” in hospital pricing.
According to the AEI announcement, Scott will outline his proposal to “provide more transparent information to consumers about the prices hospitals charge and the quality of care they deliver.” After the speech an expert panel will examine public policy issues involving information transparency, price disclosure, and consumer protection for hospital services.
That’s all well and good, if only his proposed legislation was as principled.
Ironically, under the guise of transparency, the language of Scott’s bill mandates hospital price levels be set only with the approval of “an appropriate government agency.”
As the legislation says:
(1) It is prima facie evidence that a price is unconscionable if:
(a) The total billed for an inpatient admission represents more than 115 percent of the average amount accepted for the health care facility for the same diagnosis related group;
(b) The total billed for an outpatient visit represents more than 115 percent of the average amount accepted for the health care facility for the same ambulatory patient group; and
(c) The total charged for an item not listed on the health care facility’s chargemaster exceeds 100 percent of the usual and customary retail price for that same item.
(2) It is unlawful and a violation of s. 501.204 for a health care facility to bill at an unconscionable price any inpatient admission, outpatient visit, or item that is necessary as a direct result of a medical emergency or medically necessary care.
(3) A price level approved by an appropriate government agency shall not be a violation of this section.
(4) Any violation of this section may be enforced by the office of the state attorney or the Department of Legal Affairs.
Fortunately, Scott’s scheme has not escaped the scrutiny of Florida media.
FloridaPolitics.com reported in October: “[Scott’s] staff has been shopping a hospital price-fixing bill to House Republicans for two weeks, and has yet to find a sponsor … In it, he calls for more government in health care, and government regulated price fixing caps for inpatient admission, outpatient visits or any other medical care.”
Christine Sexton of POLITICO Florida also noted that Scott “released a proposal to increase ‘transparency’ in hospital costs by placing caps on how much Florida hospitals can charge patients without facing potential prosecution from the Attorney General’s office for ‘unconscionable’ charges.”
In November, the Sunshine State News reflected on the irony of price fixing, above all coming from a “Free-Market-Loving” governor.
“Either the governor has been smoking something he shouldn’t, or he’s found an old pair of Charlie Crist‘s flip-flops,” Nancy Smith writes. “How else do we explain his bizarre desertion of maybe the corest of his core principles: free-market competition?
“Price-fixing for health care is half-way to socialized medicine,” she continues, “a term we euphemistically like to call ‘single payer,’ but if you’ve ever lived under it – whether you like it or you don’t – you know socialized medicine is exactly what it is.”
As for the concept of government price-fixing itself, in practice, it has proven a failure in each attempt, as noted in a 2013 Heritage Foundation report titled “Legislating Low Prices: Cutting Costs or Care?”
“Proposals to restrain the cost of health care by imposing price controls ignore their long history of failure,” the report says. “Regulated prices prevent markets from efficiently allocating resources, leading to pervasive shortages and deteriorating quality, while stifling innovation and diverting care to inequitable black markets.”
The same idea was echoed by the Federalist in 2014 when it examined “Why Medical Price Controls Are a Terrible Idea.”
Dr. Phillips Gausewitz writes: “Price controls have never worked. In the over four thousand years of history … Babylon, the Roman Empire, and into modern times in Communist countries, Nazi Germany, and in the United States with local controls on rent, and federal controls on gasoline and universal controls in the 1970s — there has never been a single instance of success where prices were controlled without serious damage.”
As Scott takes the AEI stage to promote his “transparency” plan – with live streaming on AEI.org – many free-market conservatives demand answers to three essential questions:
- What makes capping hospital prices any different from the first step toward government-run health care?
- In 2009, Scott championed four pillars of health care reform, which included “competition.” However, wouldn’t these government price controls actually decrease competition?
- In the mid-1990s, Scott was an outspoken opponent of “HillaryCare,” which included similar proposals for capping hospital costs. What made the governor change his mind, and embrace a core component of HillaryCare?
They might not get answers right away, but that doesn’t mean they will stop asking anytime soon.
