OPINION | Can the GOP stop shooting itself in the foot on health reform?

Having been in Washington for nearly 20 years, watching the Republican healthcare debacle was not unexpected: Republican leadership in D.C. has perfected the fine art of snatching defeat from the jaws of victory whilst shooting itself in both feet.

A rare talent, but as we’ve seen demonstrated, it’s quite possible to pull off.

{mosads}For seven long years, Republicans have promised to repeal and replace ObamaCare. In that time healthcare reform has been a central campaign issue, and the GOP was rewarded for it in 2010 and 2014, and even 2016, with some House seats. But suddenly these Republican and conservative leaders, who were as bold as lions when it didn’t count, have become timid lambs when given the chance to actually repeal disastrous ObamaCare.


While I certainly hope that with Mitch McConnell’s pivot to simply repeal ObamaCare might succeed, I’m in wait-and-see mode. Republicans have made strategic errors along the way.

In the last seven years, it seems that no one took the time to draft up what specific reforms the GOP could pass when repeal and replace would happen. The dozens of times the House passed repeal were nothing more than show, as it would never happen with Barack Obama in the White House.

Even after November’s election, leadership in the House and Senate didn’t hammer out what reform would look like, much less create a realistic timeline.

To add to the lack of foresight and ineptitude, House Speaker Paul Ryan needlessly made the Republican caucus walk the plank for weeks. Knowing that the House bill was almost assuredly DOA in the Senate, all Ryan had to do was pass a one-sentence bill saying, “There will be healthcare reform under budget reconciliation guidelines.” Done, end of story.

This bill would have gone to the Senate, the Senate then passes something, and then the House would have one of three options: accept it as is, amend it and send it back to the Senate, or go to conference with the Senate to hash out what the final bill would look like.

But who cares about all of this strategy when it’s far more fun to self-immolate and demonstrate your lack of ability to govern?

Now we have a bill in the Senate that, to be fair, has some good points to it, such as repealing the individual and employer mandates, cutting taxes and slashing ObamaCare Medicaid spending from $231 billion to $71 billion.

There is a real debate to be had over Medicaid, but conservatives like Sen. Ted Cruz (R-Texas) and Sen. Mike Lee (R-Utah) proposed major tweaks to ObamaCare including allowing insurance companies to sell cheaper plans that don’t meet all the excessive mandates of ObamaCare, that insurance should be sold across state lines, that health savings accounts should be expanded, and that punitive damages on malpractice suits should be capped (think tort reform), among other ideas. Rep. Gary Palmer’s (R-Ala.) invisible risk sharing pools that was a part of the House bill should absolutely be a part of the final bill.

But ultimately, all of these Republican tweaks that seek to really lower the costs of premiums won’t do enough because they fail to address one simple thing: the total lack of transparent pricing in the healthcare industry.  

In every other area of Americans’ lives, prices are right in front of you, from a gallon of milk at the grocery store to gasoline at the pump to the price of the home you rent or buy. Americans make decisions based on prices every day. Conservatives should demand transparent pricing to change this.

But that’s the rub: Insurance companies and medical providers don’t want there to be price transparency.

The two biggest consumers of healthcare plans in the United States are the federal government and employers. The federal government gets to see all the data on Medicare costs and essentially tells insurance companies and providers, “We’ve looked at the numbers and we’ll give you a margin of say 20 points.” The employers? They see nothing.  

They are flying blind in regards to what the actual costs are, which is interesting because for-profit businesses are very good at one thing: pricing. They are great at pricing. That’s how they actually figure out what the market can bear, and based off consumer interest and their costs, find the right pricing point. Insurance companies and health providers know this fact, so of course they’re not going to let employers see the numbers.

They want employers to have zero ability to price because zero transparency on costs leaves the insurance companies and providers in the driver’s seat. If for-profit businesses cannot negotiate prices on services for which they are paying, it makes it almost impossible for them to compete.

So this brings us to what is the biggest issue with real healthcare reform. Insurance companies and providers have one goal in mind: seeing prices go up. They essentially want to approach healthcare with high margins and low volume. 

But that’s not what benefits the American people. What’s in the American people’s best interests is a high volume, low margin approach. Beyond the price transparency, a high volume, low margin approach will also spur economic growth.

There are other significant issues that can and should be addressed. Under our current system, we have created the exact opposite of a market-driven approach. We have allowed, through our tax code, hospital systems to receive the same treatment as charities. That’s right. Almost two-thirds of the hospital systems in the United States operate as charities.

Yet, you see hospital systems like Oregon’s Providence Health and Services making windfall profits and sitting on $6 billion in cash.

It’s high time we as a society and as a government looked in the mirror and face the fact that when we allow businesses that make up a substantial part of our economy to act as charities, we are inviting, almost begging for, price inflation.

So the solution to much of this problem is actually quite simple. The tax code needs changing to say the following:

  1. An exempt purpose shall not include revenue from services exceeding $20,000,000, unless pricing for those services are readily available to the general public in the same manner as which they appear on an invoice for those services.
  2. Pricing shall include the list price, average discount or grant, median price paid, and average price paid.
  3. Readily available is defined as availability on public facing websites or on demand phone access.

That’s it. If that were to happen, it would change healthcare as we know it. It is high time that our healthcare system in the United States became a patient-centric business again, not the testing and procedure business that it has become. Price transparency and high volume, low margin approach to care is what makes that happen. Time to put the American people, not the insurance companies and providers, first.

Ned Ryun is a former presidential writer for George W. Bush and the founder and CEO of American Majority. You can find him on Twitter @nedryun.

The views expressed by contributors are their own and not the views of The Hill.

Tags Mike Lee Mitch McConnell Paul Ryan Ted Cruz

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