Eight prominent health economists—including moderate liberals and moderate conservatives—have offered a key Senate chairman 13 recommendations for government actions to reduce the growth of healthcare costs.
But one of those economists conceded that the chances of federal or state action on most of these proposals is dim due to partisan deadlock in Congress and opposition from stakeholder groups.
The economists from the Brookings Institution and the American Enterprise Institute sent the suggestions Friday to Sen. Lamar Alexander, chairman of the Health, Education, Labor and Pensions Committee, at his request.
Meanwhile, eight health policy experts at Johns Hopkins University sent Alexander a separate report on actions states are considering or taking to directly reduce healthcare price growth.
In December, Alexander invited researchers, providers, insurers, patient groups, and state regulators to submit proposals by March 1 on how to lower costs, incentivize better care, and increase the ability of patients to make informed decisions.
The 13 proposals from the Brookings and AEI economists all deal with ways to reduce costs by making the healthcare market work better, rather than trying to regulate prices, which is the approach the Johns Hopkins experts favor. The 13 ideas all have been suggested before but have been blocked or only partially implemented.
- Expanding mandatory bundled-payment programs through federal legislation.
- Reforming Medicare benefit design and Medigap cost sharing.
- Expanding site-neutral Medicare payments.
- Boosting funding for federal anti-trust enforcement.
- Encouraging development of all-payer claims databases through federal action.
- Removing state regulatory barriers to provider market competition.
- Ending surprise out-of-network medical bills through federal legislation.
- Increasing Medicare payments for primary care and reducing them for other services.
- Reforming payment for physician-administered drugs in Medicare Part B.
- Revising Medicare Part D's protected classes and its reinsurance program.
- Offering greater financial incentives in Medicare Part D for use of generic drugs
- Limiting the tax exclusion for employer-sponsored insurance.
The proposals with the best odds are those to eliminate surprise bills and encourage state all-payer claims data bases, said Joseph Antos, a healthcare scholar at the American Enterprise Institute who co-authored the letter to Alexander.
Bipartisan legislation to address surprise bills is already in motion in the Senate. And Antos sees all-payer databases as "politics-neutral," because everyone realizes there's a big need for better information on the provision and consumption of healthcare services.
His group said action by Congress or the U.S. Department of Labor is needed to overcome a 2016 Supreme Court ruling barring states from requiring self-insured plans to share data with state claims databases.
The Brookings-AEI recommendation that's least likely to see any action is to limit the tax exclusion of employer-sponsored insurance, which is strongly opposed both by business and labor unions. The eight economists urged Congress to either cap employers' tax exclusion at the 75th percentile of premiums or end its delay on the Affordable Care Act's excise tax on high-cost employer plans.
"Neither of those things will occur," Antos lamented.
Several of his group's proposals focus on state actions to enhance provider competition, such as repealing any willing provider laws, to make it easier for insurers to narrow their networks, and reforming certificate-of-need laws, to allow new competitors to enter markets. The economists suggested tying state action in these areas to federal funding.
At the very least, Antos hopes Alexander's search for cost-control solutions will lead to fresh Senate hearings on these issues. "Sen. Alexander and the leaders of other key congressional committees realize that if you get a list of proposals from people who have different political views but a common understanding of the problem, that's not a bad basis for picking out one or two things to work on," he said.
Other experts see greater potential in the states than in Congress for action on reducing healthcare cost and price growth. In their letter to Alexander, the Johns Hopkins experts called attention to moves in a number of states to regulate prices or slow price growth, including through global budgets and heightened price transparency.
"If the U.S. aims to lower or at least stabilize health care prices, the process must start with the prices paid by the private sector," they wrote. "By focusing on the high prices paid in the private sector, the U.S. should be able to lower the rate of increase in health spending to a rate commensurate with overall economic growth."