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Friday, February 10, 2017

Taming the beast of high hospital costs - By Rep. Tom Wood

Found here. My comments in bold.
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Tom Woods does what a lot of leftists do, he takes a rare scenario and magnifies it so as to justify his position. 
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As I see it, health care in the United States is a failed experiment. (We would certainly agree, but why is it failed? Accurately diagnosing the problem is key to finding a solution. Rep. Woods will not do this.)

What I mean is that prior to 1972, we had price controls on health care costs. The Nixon administration removed those price controls and we began an experiment of converting what is a “need” — medical care — into a commodity like any other thing to be bought and sold. (Incorrect. This chart shows historical spending on healthcare, and it's pretty clear that spending began its precipitous rise in the mid 1960s, when Medicare and Medicaid were passed:


So the author's fundamental premise, that making the government less involved has increased prices, is wrong. Thus, all his conclusions are wrong as well.)

We should recognize that this was a mistake. When it comes to hospital care it’s usually a need, not a want. (We also need food, clothes, and heat in the winter. Should those things be government supplied?) 

Consider this: We have been using a “market model” for decades (We have not. Actually, we have been using the government control model and the government program model for decades. And by the way, who is "we?")

and there is still no wide array of choices, there is still no price transparency, and there is no competition when it comes to hospital care. (Interesting, since Obamacare specifically stated it would increase choice.)

If I get hit by a bus, the ambulance is going to come and scrape me off the pavement. Do I get a choice of which ambulance company picks me up? Do I get a choice of which emergency room I go to? Do I get to choose my emergency room physician? The answer to all of these questions, of course, is no. (Emergency room spending is only about 2% of the national cost of healthcare. Thus 98% of healthcare expenses can be shopped for.)

Simply stated, hospitals have been monopolies since 1972, (This is an incredible claim, and quite false. "According to the AHA, about 18 percent of U.S. hospitals are private, for-profit hospitals, while 23 percent are owned by state and local governments. The rest are private, nonprofit facilities.")

and prices at hospitals have been increasing at an unreasonable rate ever since then. (Again we note that the problem began when government increased its involvement in the healthcare system in the mid 1960s.)

It now costs thousands of dollars a night just for a room in a hospital, and that doesn’t include the care you get. God help you if you end up in the intensive care unit because that could to cost tens of thousands of dollars per night. This is ridiculous.

Hospitals have become one of the most profitable enterprises in the economy. (Since only 18% of hospitals are for profit, we can see how specious Mr. Woods' claim is.)

It is disturbing to me that they have been using their economic power to purchase private medical practices and consolidate the industry under their management. (Unsupported assertion.)

I think it’s time to recognize that hospitals are behaving like monopolies. As such, we need to control them like monopolies. (It is clear this is false.)

That’s why I have drafted legislation to do just that: treat hospitals like the monopolies they are. House Bill 395 redefines hospitals as public utilities just like electric utilities, railroads and water systems. Public utilities’ rates are controlled by our Public Service Commission because there’s a recognition that there is a need to protect the public from predatory pricing. (Ah, yes. The typical leftist response, more government control.)

By defining hospitals as public utilities, the PSC can set their rates. While that may seem complicated, there is a system that sets rates already; all hospital procedures and costs are currently defined, coded, and priced by the Medicare system.

Recognizing that Medicare rates are too low, HB 395 would allow hospitals to charge rates that are somewhat higher than standard Medicare rates. For private hospitals, the charge would be set at 1.5 times the Medicare rate. For the so-called “nonprofit” hospitals the rate would be lower, at 1.38 times the Medicare charge. (Waaait. I thought hospitals were a monopoly?)

This bill is scheduled for a hearing in the House Human Services Committee on February 15, at 3 p.m. in the Capitol. If you have something to say about hospital bills, I encourage you to testify at this hearing. If you can’t make that, I’m inviting Montanans to share their stories of outrageous hospital prices for via the web. I’ve set up a web portal on my Facebook page (Representative Tom Woods) for just that. Montanans can confidentially share their stories on that page. Make your voice heard. Your examples will help make the case that this kind of legislation is needed.

I’m certain that hospitals will not be happy about rates being imposed on them, but to that I would respond that we the people are sick and tired of their rates being imposed on us. (Rep. Woods doesn't seem to have the curiosity to ask why hospitals charge high rates. He prefers to treat the symptom without finding the cause. Healthcare is expensive because government has made it that way, not only by mandating coverage, but by creating a environment of litigation, narrowed competition, and insurance company regulation. 

Imposing price controls has never worked, and will not work this time, because the problems will continue to get worse, but those problems will not be visible because they will not show up in pricing.)

They, the hospitals, would still have the option of going before the Public Service Commission to justify a request for higher rates. This would be just like other public utilities who have to present their costs in order to justify their profits.

That’s a fair system that protects us, the people who pay the rates. (Deeming his proposal as fair doesn't make it so. It's extraordinarily unfair to have government force its way even further into the healthcare system, creating more havoc, and eventually, creating a rationed system.)

Democrat Tom Woods represents House District 62 in Bozeman.

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