Free markets improve quality and reduce prices. But, to work optimally, they require certain pre-conditions.
To work properly, markets can't conceal prices. They can't insulate consumers from the costs of their decisions. And they can't have buyers who are ignorant of the appropriate places to receive services because they are disconnected from the consequences of their consumption decisions.
Unfortunately, such is the condition of our health care markets. We have opaque pricing, third-party purchasers, and, in Medicaid, a lack of health care literacy by recipients who needlessly crowd our emergency rooms.
Last Monday, the House Committee on Government Oversight and Accountability started hearings on House Bill 1901, the Medicaid bill sponsored by Rep. Torpey which I have co-sponsored. Our first hearing focused on these (and other) problems.
Ensuring health care pricing transparency
We've all been there. You or someone you love has a serious medical treatment. You're thankful to have received good medical care. But you didn't ask many questions about costs. In fact, had you asked, you likely wouldn't have received a clear answer. Then you get the bill - and you're shocked at some of the prices.
As explained by Steven Brill in Bitter Pill: Why Medical Bills are Killing Us, "When you look at the bills that ... patients receive, you see nothing rational - no rhyme or reason - about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay." Brill's article presents a compelling case for serious payment reform. He adds, "There is little patient pushback against higher costs ... because the customer getting the treatment is either not going to pay for it or not going to know the price until after the fact."
HB 1901 attacks sticker shock by requiring health care providers to give accurate pricing information upfront. This simple provision merely requires providers to inform the consumer of the estimated costs of the health care services they are seeking. It follows a provision we added to state law last year which requires health insurance companies to provide policy-holders with accurate information on out-of-pocket costs associated with receiving medical treatments.
Cutting down on misuse of the emergency room
Another serious flaw in health care markets is that third-parties pay most of the bills. This is necessary for the largest health care bills - the very purpose of insurance is to guard against catastrophic economic loss) - but we still ought to mitigate the third-party payer effect.
This problem is most pronounced for Medicaid-paid emergency room visits. Though HB 1901 imposes reasonable cost-sharing on recipients, you can't require someone to pay money that they do not have. Someone who incurs no cost to receive care in the ER is more likely to seek care there even when it's not appropriate.
HB 1901 is designed to reduce misuse of the ER by expanding managed care statewide, providing recipients with pre-paid medical debit cards to give them "skin in the game," and requiring reasonable cost-sharing by healthy Medicaid recipients. Federal rules, however, prohibit requiring Medicaid recipients with serious ailments from being required to be covered through managed care plans. As a result, we must do more.
Randy Jotte, an emergency room physician at BJC, testified that the top one percent of government-funded ER users in the St. Louis region averaged more than 15 ER visits per year. These 1,088 ER super-utilizers cost Missouri taxpayers $112,000 each per year, at a total cost of $122 million. To curtail waste and abuse of Medicaid, we must reduce these numbers.
HB 1901 attacks ER misuse. It requires DSS to incentivize the construction of urgent care clinics that operate outside of normal business hours adjacent to hospital emergency rooms. It also requires DSS to (1) identify ER "super-utilizers" - defined as those who present more than 10 times in a single year at an ER, (2) educate them about appropriate places to seek care, and (3) coordinate their care to prevent the flare-ups which cause them to go to the ER.
This second provision is modeled after work already started at Truman Medical Center in Kansas City and being implemented at BJC. In Kansas City, the program has saved millions of dollars for taxpayers. HB 1901 would adopt these successful models statewide.
Other Happenings
• Spring Break: The General Assembly is off for spring break this week. Though we've made it halfway through the calendar, we still have about two-thirds of the work left to do.
• Pro-Life Legislation Advances: The House passed two pro-life bills this week. One bill increased the waiting period for an abortion from 24 to 72 hours. The second bill requires that parental notification for a minor's abortion include both custodial parents. I was pleased to vote for both of these bills.
State Rep. Jay Barnes, R-Jefferson City, represents Missouri's 60th District.