Republicans Can Lead on Healthcare Reform
With the Supreme Court having (unsurprisingly) upheld ObamaCare again, Republicans are playing defense on health policy in Washington. Advancing conservative health-policy principles at the state level—where they have majority control in 30 legislatures—allows Republicans to advance federalism while also strengthening consumer-based healthcare. While Democrats fight to shift costs to taxpayers and expand government programs, state Republicans can show that a better approach is to reduce costs and empower consumers. Here are some specific policies they can champion and expand:
• Require more price transparency. States can build on the Trump administration’s rules requiring price transparency for health plans and hospitals by including more providers, including physicians; beefing up enforcement to ensure compliance; and compiling data online in a format that allows for easy comparisons. At least nine states have built price-comparison websites for consumers, and many have or are building all-payer claims databases for payers and employers. Empowering consumers with more price and quality information is increasingly important as more patients shop for healthcare with higher deductibles and other forms of cost-sharing. New Hampshire started posting prices for imaging scans in 2007 and has seen costs reduced for consumers and insurers.
Employers can use the information to set reference prices for procedures, as California does for state employees, allowing comparison shopping and creating incentives for providers to become more efficient. Price transparency also increases pressure on intermediaries like health plans, third-party administrators, and pharmacy benefit managers to negotiate more effectively on behalf of their customers and makes it harder for them to profit despite higher health inflation from misaligned incentives.
• Expand scopes of practice, repeal certificate-of-need requirements, and promote cross-border licensing. Legal scopes of practice should be expanded so that doctors, nurses, pharmacists, therapists and other professionals can provide services up to their training and competence. What particular providers are currently allowed to do varies by state, with many restrictions unsupported by evidence of adverse outcomes. Many restrictions are dated and intentionally difficult to update to reflect advances in training, technology and research.
Certificates of need require government permission before new facilities can be built, so that such decisions are based on politics rather than market demand. New Hampshire repealed its certificate-of-need program in 2016, and Florida partly did so in 2019. State-specific licensing requirements have impeded the ability of providers, especially in mental health, to care for patients remotely. As Covid expedited federal payment reforms to encourage telehealth, states should enact automatic reciprocal licensing and other arrangements to allow providers to treat patients across state lines. Many states joined interstate compacts and temporarily eased regulations during the pandemic. These provisions should be broadened and made permanent.
• Incorporate patient-based Medicaid reforms. States have been aggressive in enrolling healthier beneficiaries in private managed-care plans, but they can do more to ensure their programs are giving patients access to mainstream medical services rather than creating a separate public infrastructure. Conservatives in Washington have long fought for block grants to give states more flexibility over Medicaid, but state Republicans should maximize the flexibility they already have to try new delivery systems, cost-sharing arrangements and benefit designs.
Simplified Medicaid enrollment and renewal requirements have increased program participation, but states should encourage beneficiaries to use sliding-scale subsidies to obtain and retain affordable private coverage rather than forcing them into one-size-fits-all, all-or-nothing government coverage. States should adopt aggressive premium support and anti-crowd-out policies, combined with more-flexible wraparound benefit requirements, rather than unnecessarily replacing private dollars with taxpayer subsidies. These reforms would also help people get off Medicaid as their circumstances improve.
States should use cost-sharing requirements to discourage unnecessary emergency-room visits, duplicate care or missed appointments and subsidized savings accounts so that beneficiaries, especially healthy adults, can share in the savings they generate by being responsible consumers. Some Medicaid reforms require federal approval and will thus test the Biden administration’s commitments to bipartisanship and state experimentation, but Republicans first have to make the requests.
• Enforce antitrust laws to counter overconsolidation among hospitals, physicians, payers and other healthcare entities. Mergers in fragmented markets can result in efficiencies and quality improvements, but many markets are already dominated by three or fewer health systems. Larger systems are more able to comply with increasingly complicated and costly government regulations, but also more likely to become dependent on government funding and less entrepreneurial. These large systems are becoming “too big to fail,” developing unhealthy codependent relationships with the government agencies that pay them, regulate them, and depend on them to deliver essential program benefits. State attorneys general can use state and federal laws to preserve competition.
Democratic success in making healthcare an advantage in the last two elections proves the Washington adage that “you can’t beat something with nothing.” State Republicans can show voters that conservative health policy entails much more than resisting expensive Democratic proposals. Republicans in Washington are in no position to repeal and replace ObamaCare, but Republicans in state capitals can advance conservative reforms that will strengthen consumer-based care, reduce the cost of healthcare, and provide a stark contrast with Democratic proposals simply to expand the role of government.
Mr. Jindal, a Republican, served as Louisiana’s secretary of health and hospitals (1996-98), an assistant U.S. secretary of health and human services (2001-03) and governor of Louisiana (2008-16).
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8