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The Abstract
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> By Torie Ludwin, Arnold Ventures
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This week at a Politico Live event, John Arnold and U.S. Rep. Cathy McMorris Rodgers (R-WA) each explained what's happening legislatively to stop unfair hospital pricing, as Evan Mintz, director of communications, reports.
All across the country, families like Ben Los’ are finding themselves burdened by unexpected, unexplained bills after visiting a local doctor’s office. The cause of these mysterious bills? Hospitals buying up small practices and slapping on “facility fees” for care delivered in an office that now is considered a hospital campus. These fees typically result in higher health care costs for patients by hundreds or even thousands of dollars.
“If you’re an ordinary person, I don’t need to explain why an [unexpected] $2,500 bill is so egregious,” Los told Arnold Ventures.
This practice also incentivizes further consolidation of the health care system by large hospitals and health systems, resulting in less competitive markets and excessive prices for the privately-insured, sticking families, employers, and taxpayers with the bill.
Hospitals provide a critical public service, but families deserve health care they can afford. So what’s the solution?
At a Politico Live event this week, Arnold Ventures co-founder and co-chair John Arnold laid out the landscape. He explained how the policy of reimbursing hospitals more for procedures that must take place in their offices rather than a doctor’s office made sense when it was first created. But then they tried to take advantage of that policy.
“Hospitals are clever, and they’re businesspeople," he explained. "They say, ‘Hey, wait, we can go buy some doctors’ practices, put them under our billing code, have this same procedure done off site, and get a higher reimbursement for it,’” he said.
And, as U.S. Rep. Cathy McMorris Rodgers (R-WA) pointed out at the Politico event, policies to fix that loophole and ensure that patients pay the same price for the same service are overwhelmingly popular across the political spectrum. In fact, working with U.S. Rep. Frank Pallone, (D-NJ) she unanimously passed the Lower Costs, More Transparency Act out of the House Energy and Commerce Committee. If implemented, the bill will take a critical step toward improving price transparency and advancing site-neutral payment reform.
Meanwhile, red and blue states are also taking on unfair billing practices by placing limits on facility fees and promoting billing transparency requirements.
It doesn’t take a policy expert to know that lawmakers need to fix this problem. “People should know, in one single bill, what it is that they’re going to be charged,” Los says. “There should be no obfuscation about what the total charge should be.”
Read our story on the Lower Costs, More Transparency Act>
Read our fact sheet on site-neutral payments>
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A Growing Movement in the States to Abolish Juvenile Court Fees
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By Michael Friedrich, ArnoldVentures.org contributor
New legislation, including in traditionally red states, is ending the practice of collecting court fees from youth and their families in the juvenile justice system.
What’s Happening: This year, Texas Gov. Greg Abbott signed a bill into law putting an end to juvenile court fees in the Lone Star State, joining several others including Arizona, Montana, Indiana, Washington, and Illinois.
Why It Matters: “The primary goal of the juvenile system is to be rehabilitative, and…these fees weren't serving that purpose — in fact, they were harming young people,” says Brett Merfish, director of youth justice at Texas Appleseed, one of the major advocates for the bill. Moreover, in some jurisdictions, the costs of collection exceed the revenue generated through court fines and fees.
What’s Next: State-level wins and support from groups like the American Legislative Exchange Council (ALEC), a right-leaning think tank, are building toward a federal effort to reduce the burden of juvenile fees.
Read our story>
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Patients and Taxpayers Need
Quality Over Quantity
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By Johanna Butler, Arnold Ventures health care manager
Despite spending more on health care than any other country, U.S. patients and taxpayers are not getting the outcomes they deserve. One of the key drivers pushing costs higher is the predominant way health insurers like Medicare pay doctors, which is based on the quantity of services they provide, rather than the quality of care they deliver to patients.
What’s Happening: The recently issued Centers for Medicare & Medicaid Services’ (CMS) 2024 Physician Fee Schedule Proposed Rule includes changes that could help reorient the health care system to deliver higher quality, more patient-centered care. Arnold Ventures submitted a letter supporting several changes proposed in CMS’ annual Physician Fee Schedule rule, including the agency’s efforts to grow participation in the Medicare Shared Savings Program (MSSP) — a promising alternative to the fee-for-service payment system that aims to provide high quality, patient-centered care while constraining spending.
Why It Matters: Under current fee-for-service payment structures, patients often face fragmented care, overtreatment, and higher costs. Both the Fee Schedule and MSSP design can create incentives to better manage population health and the costs of care.
What’s Next: Arnold Ventures supports the scaling up of effective payment models like the MSSP given their ability to deliver higher quality, more individualized care at lower costs. By 2030, CMS hopes to have all Medicare beneficiaries in an accountable care relationship (such as the MSSP).
Read our story>
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Criminal Justice
Health Care
- A piece coauthored by Sen. Bill Cassidy (R-LA) in JAMA calls for better integration between Medicare and Medicaid for dually eligible Americans.
- The Initiative for Medicines, Access, and Knowledge (I-MAK) published a new study that reveals how drugmakers were able to amass $158 billion — with a "b" — on four biologic drugs by extending patent protections beyond the expiration of the primary patent.
- Patients and doctors are calling on antitrust regulators at the Federal Trade Commission to scrutinize hospital mergers and prevent monopolies, STAT News reports.
- Axios covers how employers are arming themselves with new price transparency data in negotiations with insurers and pharmacy benefit managers over health care costs.
- The National Alliance, an AV grantee, has released a new report that debunks the top 10 myths about health care costs.
Higher Education
- The Consumer Financial Protection Bureau released a new report that found tuition payment plans often have inconsistent disclosures and confusing repayment terms, leaving students at risk of missing payments or accruing late fees, in the Washington Post. (free link)
- HigherEd Dive reports on 2U’s flat-fee revenue model for online program management companies, which serves as an alternative to the tuition-share models that can incentivize aggressive recruitment.
- Lawmakers are questioning a University of Idaho’s $550 million plan to purchase the controversial for-profit University of Phoenix, Inside Higher Ed reports.
Infrastructure
- Mark Niquette in Bloomberg notes how housing affordability has declined to lowest level on record, and it’s spilling over into presidential politics. (free link)
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"Think about not what Pharma's saying, but their actions," notes John Arnold in his talk this week onstage at Transforming Healthcare: Site-Neutral Payments & Billing Transparency, a Politico Live event, where he references how the health care industry reacts to calls to reduce costs. The event brought together industry and policy experts on how to lower fees in health care with a focus on a loophole in hospital billing, "facility fees," and its solution: site-neutral payment. Check out the set of three videos including:
John Arnold's interview with Politico's Heidi Sommer, vice president of media solutions, on being the counterweight to special interests, the idea of one percent steps in health care reform (and the so-named organization), how to cut costs without affecting innovation, and the bipartisan Lower Costs, More Transparency Act
A panel with health care industry and policy stakeholders Natalie Davis, chief executive officer and co-founder of the United States of Care; Stacey Hughes, executive vice president of government relations and public policy at the American Hospital Association; and Ilyse Schuman, senior vice president of health policy at the American Benefits Council, moderated by Politico's Health Care Reporter, Alice Miranda Ollstein
A conversation with U.S. Rep. Cathy McMorris Rodgers (R-WA), chair of the House Energy and Commerce Committee, on what's happening with the Lower Costs, More Transparency Act, also with Alice Miranda Ollstein |
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The National Collaborative on Gun Violence Research will be awarding more than $3 million in funding, provided by AV, to study extreme risk protection orders (ERPOs). Access the RFP here.
The Pretrial Justice team has released a request for proposals that will help inform and advance the field’s collective understanding of the policies and practices related to pretrial release decisions, pretrial release conditions, and pretrial services.
The Higher Education and Evidence-Based Policy teams have created a request for proposals for rigorous impact evaluations of programs and practices (“interventions”) to promote college success in the United States.
The Criminal Justice and Evidence-Based Policy teams at Arnold Ventures are teaming up to learn more about what works in criminal justice reform in an ongoing request for proposals for randomized controlled trials (RCTs) that will test programs and practices. There is no deadline for submissions.
The Evidence-Based Policy team invites grant applications to conduct randomized controlled trials (RCTs) of social programs in any area of U.S. policy. Details are here.
View our RFPs here.
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Have an evidence-based week,
– Torie
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Torie Ludwin manages digital, multimedia, and print branding projects for Arnold Ventures, including the Abstract.
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