Health care competition isn’t just a Republican messaging point

The mid-term elections are tomorrow. Polls show Republicans have a chance to take back both the House and Senate as voters rally around the GOP’s ideas to lower inflation and reduce crime.

While these ideas may lead to electoral victory, they are not the only policy priorities on the conservatives’ list. Republicans also pledged to make “transparency, choice and competition” the centerpiece of their approach to improving America’s health care system.

These principles are missing from the government-dominated status quo of the past few years. Prices are rising in large part due to declining competition in the healthcare market.

Between 2019 and 2021, hospitals and other corporate entities acquired more than 36,000 private physician practices in the United States. In 2020, less than half of doctors were in private practice for the first time.

In a less competitive healthcare market, consumers have fewer choices of providers. And with fewer sellers, those that remain can charge higher prices than they otherwise could—without offering better care.

Federal rules requiring physician practices to have and “meaningfully” use electronic health records to qualify for higher reimbursement rates are also pushing physicians into the arms of larger health systems. Investing in these kinds of systems can be expensive. Larger businesses have economies of scale that can make these investments easier to swallow.

And by diverting doctors’ attention from treating patients to processing paperwork, these rules further reduce competition by limiting the supply of care.

Demonstrating “meaningful use” requires a wealth of data on patient outcomes. Most of them are clinically insignificant. But physicians spend an average of 4.5 hours each day entering this data into the EHR. That’s 4.5 hours less that a doctor can spend seeing patients.

Republicans in Congress want to stop these anti-competitive trends by making it easier for independent doctors to stay in business. Their Healthy Future Task Force proposes relaxing data reporting requirements by physicians and working with health IT companies to reduce the number of “clicks” needed to navigate EHRs.

Republicans have also called for repealing a provision in the Affordable Care Act that bars physician-owned hospitals from participating in Medicare and Medicaid — a source of revenue so vital that new hospitals virtually cannot open without it.

The flawed policy was the result of nearly a decade of lobbying pressure from hospitals seeking to crush competition. The industry claims that doctors who own hospitals will increase the use of physician services and refer only the healthiest patients to their own hospitals.

The data suggests otherwise. There are 250 physician-run hospitals in the United States, all of which were open before the moratorium. Research shows that these hospitals drive competition in their urban areas, resulting in lower Medicare costs per beneficiary and a patient experience score seven times higher than other institutions.

By working to lift the ban on new physician-run hospitals, Republican lawmakers hope to spark more competition — and the cost reductions and quality improvements that come with it.

Republicans at the state level are also fighting for changes that would increase competition within their borders. One is the elimination of certificate-of-need laws — policies that require providers to get approval from state regulators before building or expanding a health care facility, increasing their services or purchasing expensive medical equipment.

Proponents of certificates of need say they prevent duplicate service offerings from appearing in one area. In effect, they protect incumbent providers from competition — and drive up health care prices and limit patient choice in the process.

In the 35 states with certificate of need laws, health care prices were 11 percent higher than in states without them. Both the FTC and the Justice Department concluded that these regulations “create barriers to entry and expansion, limit consumer choice, and stifle innovation.”

GOP lawmakers are sounding the alarm about these and dozens of other anti-competitive policies plaguing our health care system. If Republicans manage to secure a majority at the ballot box, voters can expect them to begin working to address them — and deliver higher-quality care at lower costs in the process.

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