Healthcare Industry Convinces Courtney to Kill Price Transparency Bill
Senate President Peter Courtney, D-Salem, halted a legislative effort to force hospitals and health insurers to be more candid about their prices following closed-door negotiations with their influential lobbyists.
The move rankled some in Courtney’s caucus who have been steeling for greater reforms after Oregon was given an F along with 44 other states by the Catalyst for Payment Reform, a national organization that scores states on price transparency. Four East Coast states plus Colorado got a passing grade.
Senate Bill 891 in its original form would have required hospitals to post their prices for common procedures paid by health insurers, Medicare, Medicaid, the school districts and state employees. In the amended version, the public would be given access to online tools with price information from the health insurers that is currently given only to enrolled health plan members.
“I was all set to move it,” Monnes Anderson told The Lund Report. “There were some political decisions made at a higher grade than I,” including “negotiations in the president’s office” with insurers, who claimed the Legislature was already asking a lot from them, she said.
“I’m disappointed we didn’t get it to a place we could move it forward,” Steiner Hayward told The Lund Report, saying she’s not giving up on the issue in future sessions.
The original bill ran into stiff opposition from the Oregon Association of Hospitals and Health Systems, as well as resistance from Sen. Laurie Monnes Anderson, D-Gresham, who described it as administratively burdensome. She favored a much less aggressive measure, Senate Bill 900, promoted by the hospitals that tasks the state with making average pricing information public from the all payer, all-claims database -- without providing any money for the budget-strained Oregon Health Authority.
SB 891’s chief sponsor, Sen. Elizabeth Steiner Hayward, D-Portland, worked with Jesse O’Brien, the healthcare advocate for the Oregon State Public Interest Research Group, to craft a compromise Monnes Anderson could accept -- making public the price information that insurers provide to their members. Such information also could have helped savvy consumers shop for an insurance plan that gets them the best deal. Health plans that did not have a user-friendly portal would have had to comply by 2017.
“I think it’s very important that if one expects everyone to take responsibility for healthcare costs that consumers have access to price information,” said Steiner Hayward. The problem is particularly frustrating not just for consumers but for physicians like herself who would like to help patients make medical decisions about the most cost-effective procedures and facilities.
Competing hospitals in the same city can charge wildly different rates to different insurers, and posted charges, typically excessive, act as rack rates that nobody actually pays. “We don’t know [the costs] and we can’t find out. That’s the issue,” she said.
O’Brien said that despite the reforms in the Affordable Care Act, middle-class consumers still face the prospect of bankruptcy and serious debt from medical costs.
He preferred putting the onus on the hospitals for such information but the idea for using existing tools from the insurers came after Regence BlueCross BlueShield lobbyist Tom Holt bragged about how user-friendly Regence’s online price-checker is for its members, which he displayed on the projection screen during the public hearing on SB 891 and SB 900.
If that information is readily available to Regence members, it could easily be offered to everyone, O’Brien said, and lead to a level of a transparency that promoted competition and helped consumers make medical and insurance decisions.
But all that transparency might force the healthcare industry to face increased competition from free-market capitalism, potentially driving down costs and cutting into profit margins. Healthcare lobbyists successfully applied last-minute pressure to the state’s most powerful legislator, quashing any real reforms this session.
“There’s no reason [price information] shouldn’t be out in the open like it is with any other business,” O’Brien said. “There’s no reason it shouldn’t be out and available to everyone, but the healthcare industry sees it differently.”
Courtney’s spokesman Robin Maxey did not respond to a request for comment, but Molly Woon, the spokeswoman for Senate Majority Leader Diane Rosenbaum, D-Portland, offered this statement:
“Our office’s understanding is that this bill was not ready to move with the committee deadline. It did not receive sufficient input from all the stakeholders, and we simply ran out of time. Our understanding is that stakeholders will continue to work on this concept in the interim with the goal of getting a bill in front of the Legislature for the 2016 session.”
O’Brien countered this statement, saying the amendment had been shared with the opponents in advance of Monday’s vote and any fixes could have been made in the House after the bill passed the Senate: “If the idea is that more time is needed to reach a consensus, I don’t think there’s a consensus to be had. It’s a controversial issue.”
Tough Campaign for Courtney
Despite his decades in public office and his position setting the agenda for the Oregon Senate, Courtney faced a surprisingly strong election challenge in 2014 from Marion County Commissioner Patti Milne, who lost by 2,700 votes out of about 30,000 votes. He also outspent Milne 2-to-1 to retain his seat.
The Oregon Hospital Political Action Committee gave Courtney $12,000 in the year before the 2014 session, including a gift of $2,500 immediately before the session started.
Courtney’s narrow victory was closer than a more high-profile contest farther up the valley in Corvallis and Albany, where then-Rep. Sara Gelser, a Democrat, ousted Republican Sen. Betsy Close by nearly 6,000 votes.
Greg Van Pelt, the executive director of the Oregon Health Leadership Council, an influential group of business leaders, health insurers and hospitals, said that SB 900 was a way for the state to improve Oregon’s grade while allowing health insurers and hospitals to voluntarily proceed with pricing reform.
He told The Lund Report that the best method for consumers to get price information for elective procedures was to contact the insurers or use the online tools shared by Holt. Hospitals have been voluntarily offering their sliding-fee schedule for uninsured patients in advance.
The average pricing data offered by SB 900 could be a place to start while discussions continue on the best path forward. “It’s helpful information to all hospitals to know if their prices are out-of-line,” he said.
But Steiner Hayward questioned the value for patients of using historic data on statewide averages for procedures. “They [the data] don’t really tell people what they need to pay.”
Van Pelt shared an article from Kaiser Health News showing that people surveyed did not use the available -- albeit very limited -- information they do have, and getting the data that consumers will use is not as straightforward as it may seem. “Before you build the sidewalk, find out where people walk,” he said.
Sen. Chip Shields, D-Portland, also disagreed with Van Pelt’s position, to put it mildly.
“Senate Bill 900 does virtually nothing,” Shields told The Lund Report. “It’s an attempt to head off at the pass Senate Bill 891, which would provide real transparency for patients.”
Shields opposed SB 900 outright, while Steiner Hayward might not support the bill once it reaches the Committee on Ways & Means. There’s no funding included for the Oregon Health Authority to set up the website, but that agency has requested $139,000 a year to hire and assist a web manager to post data on the website.