Senator Marshall: We Need to Turn Patients Into Consumers Again
Senator Marshall Questions Witnesses at Special Committee on Aging Hearing
Washington – On Wednesday, U.S. Senator Roger Marshall, M.D. (R-Kansas), questioned witnesses, including, Entrepreneur Mark Cuban, Co-Founder of the Surgery Center of Oklahoma and the Free Market Medical Association, G. Keith Smith, M.D., and Chief Health Director of CalPERS, Don Moulds, PhD, during the Senate Special Committee on Aging hearing focused on how shoppable services can improve outcomes and lower costs.
Click HERE or on the image above to watch Senator Marshall’s full exchange.
Highlights from the hearing include:
On price tag transparency in healthcare costs:
Senator Marshall: “Thank you so much, Chairman. I appreciate the invite to come and welcome to our guest as well. Could you imagine going into a restaurant you look at the menu, have your choice between a good Kansas City strip or some day-old chicken with gravy and cream on it to make it taste good, and not knowing what the price tags are? Could you imagine you need a new pickup truck to pull the fishing boat with? And you go online, you look at the Ford and a Chevy, and a Dodge. Of course, the Dodge is the best, but you want to look at the price to help figure out which is the best deal. But for some reason, in healthcare, it’s the only industry in the world, in America, that doesn’t have a price tag with it. So, consumers have no idea. When a patient would come to me and I would say, Look, you need an infertility surgery. They would say, what does it cost? They would ask, does my insurance cover it? So, for seven, eight years, we’ve been working on legislation, a price tags bill, and I want to just briefly describe it to you all. If you don’t mind what it does, I’ll make sure I get this right. It requires public reporting of negotiated rates, cost, and cash prices for services at hospitals, surgery centers, imaging centers, and clinical labs, so that price tags for the hospital. And number two is it ensures a group of health plans have access to claims data and prevents third-party administrators from restricting data access. Anyone who’s ran a business, isn’t it frustrating? We’re trying to convert from a traditional insurance to a self-funded model, and the insurance companies won’t give us our own data. Whose data is that? So, we fixed that. And number three, it requires patients to be provided an itemized bill for each succinct service as well. So, I’ll start with Dr Smith. What would that have? What impact would that have on health care costs, specifically across the country? In your guesstimation.”
Dr. Keith Smith: “Ithink it would have a real positive effect on costs, because more companies would self-fund, and self-funded companies are essentially our proxy buyers for individuals, so they have the same sticker shock that an individual does. And if a company has their own data, and they can actually look at claims, they can compare what they paid, you know, with paid $75,000 for a gallbladder.”
Senator Marshall: “Great point. The only one whose health insurance costs are not going up are self-funded plans that have a direct primary care doctor running that the folks in there as well. Do you think it would bring down the prices, though, of the hospitals you’re competing with? Would they bring their prices down?”
Dr. Keith Smith: “Oh, absolutely, because the self-funded companies with sticker shock would patronize price-transparent facilities like mine, and the hospitals would have to match that, or they’d lose all that business.”
Senator Marshall: “Mr. Cuban, you could talk about the pharmacy industry, how PBMs hide it, or you could just talk generally about health care. What the impact of a price care price tags bill would do? Do you think it would be great?”
Mr. Mark Cuban: “I mean, I like for my companies, we’re already starting the process of direct contracting, and the only way you can direct contract is if you know the prices, and by knowing the prices, we can make our own determinations about what our cost of care be. Because once we have our claims, we can look at our historical claims and kind of extrapolate to see where they’re going but point two to that is it would crush the big insurance companies, because it allows us, and this is what we’re doing, to a direct contract with providers and B just work with a third party administrator to handle all the services and just figure out the care navigation with a third party as well. They’re really, you know, it’s rare that insurance companies take all the insurance risk these days, and so this is just one more way to accelerate the move from them towards people, companies, in particular, taking responsibility for all their own care.”
Senator Marshall: “Dr. Moulds, would you have anything to add to what the impact of the price tags bill would mean?”
Dr. Don Moulds: “No, anything that can be done to increase price transparency from our perspective is going to be a good thing. You know, we have a much better sight line into prices because of our size. We require a lot of information through our contracts. There’s still opacity out there. But for folks who are smaller employers, for example, they often don’t and they don’t have the same kind of sight line, and it’s incredibly important for them as well.”
Senator Marshall: “So my belief is whatever we can do to turn patients into consumers again is going to help bring the cost of health care down. And if you want to be a consumer, you have to know the prices as well. Mr. Kubin, you want to talk a little bit just about the opaqueness of PBMs, the traditional PBMs, and how they truly are hiding the cost from when mom and dad when they go to their local pharmacist.”
Mr. Mark Cuban: “Cost Plus has been in business three and a half years, and we’re still the only pharmacy that publishes their entire price list, as Mr. Moulds mentioned; he used us as a reference price when the FTC investigated the PBMs; they use Cost Plus. Drugs are priceless as a reference price. And so they’re doing all they can to prevent transparency. They also do the same thing with contracts. Anytime you have a contract with an employer in particular or state or federal government, they always put in there, there may be other fees that we charge you, right? And then they’ll play games like with rebate GPOs. What a rebate GPO is. You would think a PBM is big enough to just negotiate with the brand manufacturers and get the best rebates they can. But that’s not what they do. They create these intermediary subsidiaries called rebate GPOs that in turn go and negotiate with the brand manufacturers take. Let’s in any given example, 60% in rebates give back 40% to the actual PBM, who, in turn, goes to the plan sponsor and says, here’s the whole 40% not disclosing that they kept 20% through their rebate GPO. So those are the types of things, and there’s a long list more, but I will say the one thing for every employee or anybody listening, is if you’re paying any fees as a percentage of the price of a drug, you’re getting ripped off.”
Senator Marshall: “That’s what we call our delinking bill. I take care of that as well. And the bad news is, they’re moving these GPOs offshore, so they don’t have to obey any of our laws. Thank you so much, Chairman, thank you for holding this hearing.”
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Contact: Payton Fuller
