Price Controls Have No Place in Health Care

By Ron Paul

​As Congress continues passing trillions of dollars in spending bills aimed at addressing COVID-19, they should avoid harming those on the front lines: health care providers.

Health care providers are working hard, sometimes at personal risk, to treat those affected with the virus. Their job is made harder by the hysteria whipped up by politicians and the media. This makes people flock to emergency rooms and doctors’ offices. And, this comes on top of the challenge already facing the medical profession as a result of federal laws like ObamaCare, and rules limiting the number of hospital beds in certain areas.

Incredibly, a bipartisan group of U.S. Representatives and Senators think the government is not putting enough burdens on health care professionals. These legislators are scheming to insert a provision placing new price controls on health care practitioners in the COVID-19 spending bill.

The price controls are a response to “surprise medical billing.” This is the all-to-common situation where a patient receives a large medical bill, sometimes months after treatment, because one or more of the providers on their medical team were “out-of-network” so that providers services are not covered by the patient’s insurance.

Surprise medical bills are a consequence of government policies that have created over reliance on third-party payers. By removing control of the health care dollar from patients, these government policies eliminated all incentives for patients to minimize costs.  This led to the growth of the Health Maintenance Organizations (HMOs).  One way HMOs control costs is by only paying for procedures done by a member of their (increasingly) narrow networks.

Surprise medical bills are a legitimate problem, but the solution is to restore free-market health care. Sadly, but not surprisingly, few, if any, in Washington are working to include free-market health care reforms in the COVID-19 legislation. Instead, most of the legislators working on the issue support giving government power to dictate how much “our-of-network” providers should be paid.

Like all price controls, these schemes will reduce supply as the low payments drive providers to refuse to see patients unless they are among the select few in that patient’s “narrow network” of allowed providers.  These price controls may even cause some providers to leave the medical profession altogether.

These provisions could make it harder for those with COVID-19 to obtain care.

At this writing, it appears that the third COVID-19 bill might contain these price controls. This price control scheme is backed by some of the most influential U.S. Senators and Representatives in Congress.  It is also being pushed by the insurance industry, which loves the idea of government “forcing” it to underpay out-if-network providers almost as much as it loved the idea of government mandating every American buy their product.
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Those of us who understand that trying to solve the problem to surprise medical bills with price controls is a cure worse than the disease must remain vigilant against any attempt to expand government’s role in health care. We must also work to enact policies giving patients control of the health care dollar through tax credits, deductions, and expanded Health Savings Accounts (HSA). The cure for what ails our health care system is the same as for all our economic problems: liberty.

This article was originally published at the Campaign for Liberty.