aAs two former secretaries of the Department of Health and Human Services, we know all too well the struggle to find a narrow bipartisan path. Although our approaches differ, we believe that addressing health care costs is a truly bipartisan issue. If we are serious about ensuring people receive the best possible care, that care must be affordable to patients and taxpayers. One issue in particular that requires bipartisan compromise is site-neutral payments.
Although we have served under presidents of different political parties, we have both recommended that Congress adopt policies that promote site-neutral payments to save patients and taxpayers money. People should pay for the care they receive, not for the sign on the door.
Imagine your favorite independent coffee shop is acquired by a global chain, and your $2 cup of coffee jumps to $4 overnight. Same coffee, same barista, same building. Only the company name of the cup has changed.
That is essentially what is happening in the medical field. When a freestanding physician’s office is purchased by a hospital system, the office appears on paper as “hospital property,” which increases the price of an X-ray, injection, or consultation. Even if nothing is written about the location. Or the services provided in the real world have changed. This designation allows owners of new hospital systems to charge higher rates for services performed in their offices, resulting in higher fees.
Instituting site-neutral payments would solve this problem and prevent hospitals from charging additional fees for services provided in physician offices and outpatient clinics.
Costs increase as you pay more depending on where your health care services are performed. It also fosters consolidation and makes it difficult for independent clinics to compete. Current payment policies incentivize hospitals to purchase independent physician practices and allow them to charge hospital prices for the same care, driving up costs.
data show Cancer patients treated in a hospital’s outpatient clinic will be charged 141% more than if the exact same treatment were provided in a free-standing facility.Some patients may also face additional unfounded problems Additional charges may apply depending on the hospital Purchase an independent facility. These perverse incentives are causing more and more care to move from stand-alone clinics to hospital outpatient departments, increasing spending without improving patient care.
Presidents Obama and Trump both tried to solve this problem by including site-neutral payment policies in their budget proposals. In 2015, President Obama signed it into law. Bipartisan Budget Act of 2015, implemented site-neutral payment reform for the Medicare program. Promoting the concept of site-neutral payment policies was also a guiding principle of the Trump administration. Proposes expansion of site-neutrality policy in budget law to previously exempt facilities; Publishing rules Demanding transparency in hospital prices; Support legislation to ban surprise medical billing.
But work remains, and there are new opportunities in this Congress. Last June, the Medicare Payment Advisory Commission (MedPAC), a bipartisan group of experts advising Congress; Recommended to lawmakers to promote site-neutral payments Covers selected low-complexity medical services such as consultations, x-rays, minor procedures, and drug injections. These recommendations have the potential to save patients and taxpayers billions of dollars while reducing perverse incentives for consolidation.
Site-neutral payments are common sense policies that reduce costs for patients and taxpayers. It would reduce perverse incentives for integration and encourage provision of care in the right places and at the right prices. We believe this makes sense and will reduce costs for patients and payers.
Alex Azar serves on several corporate and advisory boards and is an adjunct professor of business and senior management at the University of Miami’s Herbert School of Business. He served as Secretary of the Department of Health and Human Services from 2018 until 2021. Kathleen Sebelius He is the CEO of Sebelius Resources LLC. She chairs the board of directors of Humacyte and serves on the boards of several other health-related companies. She will continue her policy work with the Kaiser Family Foundation (KFF). She co-leads the Aspen Institute’s Health Strategies Group. She served as Secretary of the Department of Health and Human Services from 2009 until 2014.
