Private equity, government regulations in health care ripped in House Ways and Means Committee hearing

© Gary Blakeley - stock.adobe.com

Lawmakers railed against private equity investment in health care, but it’s unclear how that could affect federal efforts to open up price information for medical treatment.

The U.S. House of Representatives’ Ways and Means Committee met July 26, 2023, for a markup session on two pending bills, the Health Care Price Transparency Act of 2023 and the Providers and Payers COMPETE Act. At least 27 legislators spent more than three hours discussing the bills and amendments in the session in Washington, D.C., and broadcast online.

Deliberations included partisan accusations about too much or too little regulation that would make information more available or more obscure to patients. Discussion touched on pharmacy benefit managers, Medicare Advantage, and other elements about quality of care, market conditions, and the cost of doing business in medicine.

Doctor speaks out

As for physicians, cutting their pay is not the way to reform health care delivery across the nation, said Rep. Gregory F. Murphy, MD, R-North Carolina. A surgeon, Murphy delivered an impassioned plea for doctors and patients.

The legislation “is an excellent first step,” although trying to get prices out “really does very little to move the needle,” Murphy said.

Health insurance premiums have gone up 140% since passage of the Affordable Care Act, Murphy said. He criticized United Health Care for its size and reach across health care, from physicians to insurance to prescription drugs, although “so many others” are engaging in vertical integration in health care.

The current administration is “protecting the middlemen” to the point where physicians cannot pay their employees. The U.S. Centers for Medicare and Medicaid Services has disregarded the No Surprises Act, but now is proposing another cut to physician reimbursement, Murphy said.

“What other field expects to be cut? So when you’re cut and cut and cut, what do you have to do? You either give up, you become a concierge services, you sell out to private equity or you become part of a massive (board) of hospital administrations and places like United Healthcare, these massive vertical integrations that have absolutely destroyed medicine,” Murphy said.

The middlemen “are essentially extorting the American patient and bleeding them dry,” he said.

“No longer is it about a doctor and a patient, it’s about a doctor and the 15 other people in the middle between … the doctor and the patient and how they get paid.”

Regulating care

The legislation includes important provisions that will empower patients to make informed decisions and put patients “in the drivers’ seat of their own care,” said Rep. Brad Wenstrup, MD, R-Ohio.

“Today's bill is an important first step in finding the right balance to improve transparency for patients, without creating overly burdensome, reporting requirements, for the providers, who care for them,” Wenstrup said. “And I would say that as a body and as a government, we should be focusing more on enhancing care and less on over-administration of caregiving itself.

“And we have to be honest with ourselves someday and take a look at some of the things that we have done to have to drive physicians to do things like private equity,” Wenstrup said. “I never practiced in a private equity situation but I will tell you part of the reason you have doctors here in Congress today is because this government has taken the joy out of taking care of people.”

Increasing transparency

The Health Care Price Transparency Act of 2023 would expand rules approved by Congress and President Donald J. Trump that require hospitals to publish their prices. The requirements would be extended to ambulatory surgical centers, imaging centers and laboratories, said committee Chair Rep. Jason Smith, R-Missouri. Earlier this year, the committee learned that among more than 6,000 hospitals in the country, up to 75% are not complying with those rules, Smith said in his opening statement.

"For decades, health care inflation has far outpaced normal cost increases for most other services,” Smith said in his opening statement. “Many people now spend the biggest portion of their income on health care. While costs continue to rise, our system makes it nearly impossible for patients to figure out the actual price for almost any type of treatment, drug, or procedure.”

Opportunities left on the table

It’s disappointing to imagine what the legislation could have been with shared goals and good-faith negotiations, making “significant progress for all members of the American family,” said Rep. Richard Neal, D-Massachusetts.

“Other opportunities for stronger health care industry oversight were left on the table today,” Neal said. “Increasing consolidation with insurers, pharmacy benefit managers, and providers which we know has led to more opaque marketplace outcomes – you need an infusion of sunlight to promote better competition. Democrats won't waver in our efforts to help make informed decisions about their health care. Workers and families must be able to understand that health care insurance options available to them should be readily transparent, and rely on robust oversight that prevents anti-competitive tactics and then protects consumers. Unfortunately, the legislation before us today, misses an opportunity to strengthen these safeguards.”

Private equity investment

In various parts of the discussion, Rep. Bill Pascrell, D-New Jersey, Rep. Linda Sanchez, D-California, Rep. Judy Chu, D-California, Rep. Brian Higgins, D-New York, all commented on recent trends and reports about private equity investment in health care.

Investors have spent billions acquiring health care practices incrementally to avoid government antitrust oversight. Then they cut services and raise prices, leading to worse patient care, Higgins said.

“Private equity hurts patients, it hurts physician groups, it hurts hospitals, it hurts the American people,” he said.

Rep. Beth Van Duyne, R-Texas, countered with a reference to a hearing last week in which physicians described problems government regulatory burdens and health care consolidation, not having private equity money to invest in their practices.