Health care rate-setting: too good to be true

Americans are increasingly frustrated by the high cost of health care. The temptation to buy into any snake-oil remedy to address the problem can be nearly overwhelming. In a handful of states, this has led to allowing the government to set the prices. Pure and simple: Rate-setting by a bunch of government bureaucrats is nothing more than fool’s gold.

Why would anyone think something as complex and fluid as health care could be managed well by government? Putting government between doctors and patients is bad medicine. Worse, even if the idea had merit, putting it into practice has already produced results to indicate demonstrably that rate-setting does not work.

In Maryland, Oregon, Washington, and every other state that has put rate-setting into place, the story is the same. Colorado is the latest state to take the plunge. It is just a matter of time until the bad news becomes reality there as well.

So, who is behind the push for government setting rates? The giant insurance companies that would benefit from the policy. After all, government itself, save for the military, does not actually deliver health care. Locking prices into place means insurance companies know in advance what they will be paid. This certainly reduces the risk they are taking, but should these huge companies be the only consideration in how we price and deliver health care?

When government sets rates, the outcomes are as predictable as the change in seasons. It results in fewer doctors. They depart to states where they are free to practice without government bureaucrats or politicians arbitrarily deciding what a given procedure should cost.

Health care facilities, especially in rural areas, are reduced in number for the same reason. So, rather than driving down the cost of health care, rate-setting invariably leads to significant increases for many patients.

Quality of care is also compromised. Doctors and facilities being squeezed by government are forced to lay off workers and reduce investment in new technology and products.

Government is a blunt instrument. It is not constructed to make rapid adjustments. So, prices remain the same even as outside factors change. A procedure that is complicated and expensive now can become simple and cheap in the blink of an eye.

As the president of United Seniors for America (US4A), I am especially concerned about the negative impact of rate-setting on seniors. Making health care less accessible is a death sentence for many of us.

UA4A is committed to engaging in the battle against rate-setting. We understand the attraction to the concept. It sounds so good to hear that government will take care of things, set prices that are fair, and assure citizens have access to care. The problem is, as the data clearly show, it is too good to be true.

We believe an informed public will not allow rate-setting to become policy. Get the facts. Then, get involved. Go to www.usaseniors.com to learn more about this issue and what you can do to help put the brakes on rate-setting.

Rate-setting is an answered prayer for the giant insurance companies. For everyone else, it is a curse. We cannot let it happen.

Bill Greener III is president and principal spokesperson for United Seniors for America (US4A), an advocacy organization for seniors who support right of center principles and policies.