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Opinion: More price controls are the wrong Rx for health care in Colorado

While impeachment dominates the national news cycle, one policy debate lingers just below the surface: how to deal with “surprise medical bills.” 

One proposal would use the heavy hand of government to impose price controls on treatments subject to surprise billing.

Doctors and providers are adamantly opposed, favoring alternative solutions. Over the summer and fall, millions of dollars have been spent on television and radio ads promoting and opposing price controls (otherwise known as “rate-fixing”). 

John Cooke

Just another debate between competing policy advocates? Hardly. On this issue, doctors and providers are on the side of freer markets. Price controls are yet another step toward socialized medicine – complete government control over health care.

Colorado’s congressional delegation would be wise to say no to any fix that relies on price controls to fix the surprise medical billing problem.

To be sure, surprise medical bills are a real problem. Through no fault of their own, patients too often face unexpected and financially devastating bills after obtaining care – particularly emergency care. 

When they cannot pay the bill, insurers and providers are stuck negotiating the bill. A fixed-rate (price control) settlement, mandated by law, sounds simple, but in reality carries terrible consequences.

We don’t need to speculate. The current medical system is replete with price controls. Virtually any program involving government insurance (e.g., Medicaid) is subject to price controls. 

When prices are set too low, doctors and providers flee the system. As a result, patients who obtain their coverage through payment systems subject to price controls are relegated to second-rate care: they have less access to and choice of quality providers.

READ: Colorado Sun opinion columnists.

Alternatives to price controls exist. Several states, for instance, have successfully experimented with independent dispute resolution (IDR) models. 

IDR removes patients from the middle of billing disputes, guaranteeing that they are only responsible for their in-network obligation. 

It then directs providers and insurers to an arbitration process and, if agreement cannot be reached, an independent third party determines the most reasonable rate for services provided. 

IDR incentivizes all parties to be as fully transparent to patients as possible, so as to prevent such costs. Contrast that with price controls, which force providers to shoulder most of the bill. 

New York (politically, deep blue) and Texas (politically, dark red) are examples of states that have adopted variations of IDR, and the results are clear: increased network participation, fewer out-of-network claims and stabilizing prices.  

In New York, IDR saved consumers more than $400 million in costs related to emergency services; the state has resolved nearly 2,600 billing disputes since 2015; and out-of-network billing for emergency services is down 34%.

California, on the other hand, passed price controls. There, longstanding contracts between insurers and providers have broken down, as physicians have been discouraged from contracting due to below-market reimbursement schedules.  

California insurers simply pay the low benchmark payment rate in the law and forgo contracts with physicians.

Through the lens of many members of Congress, the dispute over how to handle surprise medical bills is simply a fight between competing policy advocates. 

Even by that low standard, however, Congress should not be in the business of picking winners and losers in the marketplace.

But this clash is much more than a trade dispute. Price controls distort the marketplace and relegate the affected patients to second-rate coverage. 

Furthermore, price controls are a catalyst for socialized medicine. Here’s how. Quality providers refuse to serve patient populations subject to price controls and instead focus on serving the privately insured, but at higher prices. 

Privately insured patients then complain about escalating prices. Patients subject to price controls, meanwhile, complain about lack of access to quality providers.

Discontent among both populations of patients grows, fueling liberals’ demand for single-payer, which is premised on price controls for the entire medical market.

Price controls are big government at its worst. Unlike many disputes in Congress nowadays, advocates for and against price controls have champions in both parties. This unusual dynamic presents a unique opportunity.

Colorado’s congressional delegation, particularly Sens. Michael Bennet and Cory Gardner, can take a leadership role in finding workable, effective and bipartisan alternatives to a policy (price controls) that is hurting far too many Coloradans.

State Sen. John Cooke represents Weld County-based District 13.


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