Health Subcommittee Chair Buchanan’s Opening Statement – Hearing on Why Healthcare is Out of Affordability: An Anti-Competitive and Integrated Market

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“Today’s hearing will focus on the healthcare market and how it has become more consolidated and less competitive in recent years, leading to higher prices and fewer options for patients.

“There are many factors at play in this issue and we need to work together to find a bipartisan solution.

“whether it:

  • PBM – A black box in the pharmaceutical supply chain – distorts patient costs at the pharmacy counter
  • Insurance company buys major PBM and pharmacy
  • Poor Site Neutrality in Medicare
  • Large non-profit hospital buys out everything in sight
  • Or Obamacare’s ban on doctor-owned hospitals,

“To reduce costs and increase patient access to care, we need to address these systemic deficiencies.

“I represent one of the oldest districts in the country with about 250,000 seniors. Some of the best competitors in the healthcare market are in Medicare Advantage and Medicare Part D, Part D is celebrating its 20th anniversary of the year.

“Originally a Republican idea, these programs have found ways to lower the out-of-pocket costs for seniors and have created a strong marketplace for enrollees to purchase the plan that works best for them.

“By contrast, one of the worst examples of consolidation in the last few years has been the rise of what we call vertical integration.

“This most often happens when insurers, PBMs and pharmacies merge to create huge monopolies, reducing patient access and increasing prices.

“While the FTC has allowed such mergers because of the different medical areas, there are a number of issues with fewer options for patients and less competition.

“Everyone agrees that prescription drugs are too expensive, but generics account for 90 percent of prescriptions filled each year, and three PBMs control about 80 percent of the market share. Yet the competition isn’t working as it should.

“Unfortunately, such consolidation is not limited to insurers, PBMs and pharmacies.

“Large hospital systems are expanding into previously unmet footprint areas and acquiring smaller hospitals and independent clinics to scale and beat competition.

“Hospital care accounts for nearly a third of all healthcare spending each year, reaching more than $1.3 trillion by 2021.

“This spending will only continue to grow unless we find ways to make sites more neutral and more competitive in areas where one healthcare system has bought up or forced out all other providers.

“Such behavior is disservice to voters, and now is the time to shine a light on them.

“We all want to maintain and promote access to quality health care for all Americans, but Congress has turned a blind eye for far too long and we can’t let it go. You can not.

“I worked with colleagues on Chairman McCarthy’s Healthy Future Task Force to come up with ideas on how to address the lack of competition in healthcare.

“We published our recommendations last summer, but now is the time to work hard to implement these policies.

“We need to look carefully at the following points.

  • Site-neutral payment reform.
  • Abolish the moratorium on doctor-owned hospitals.
  • Delays in hospital system integration.
  • And insurance companies working with PBMs and pharmacies to stop market distortions and restore real competition to healthcare.

“It’s not easy, but voters are the ones who suffer from our inaction, and we owe them a solution.

“As we have said before, we hope to find a bipartisan solution to the integration problem in the healthcare market.

“I look forward to working with my colleagues on both sides of the aisle to right this wrong.”

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