Aug 15, 2019 - Health

Hospitals winning big state battles

llustration of a giant health plus on top of a pile of cash, the ground underneath is cracking.

Illustration: Aïda Amer/Axios

Several states have made ambitious attempts to address health care costs, only to be thwarted by the hospital industry.

Why it matters: States' failures provide a warning to Washington: Even policies with bipartisan support — like ending surprise medical bills — could die at the hand of the all-powerful hospital lobby.

The big picture: Hospitals are the biggest contributor to rising health care spending, and states are on the leading edge of trying to curtail those costs.

Driving the news: Hospitals' most recent political victory came in North Carolina, where large systems were able to remain in state employees' health plan without agreeing to the state's proposed payment rates, according to the Charlotte Observer.

  • Last month, hospitals killed a California proposal to curb surprise medical bills. It would have limited how much hospitals could charge insurers for out-of-network emergency care, according to California Healthline, and hospitals said it would have given insurers too much incentive to exclude hospitals from their networks.
  • And in June, Washington state passed a law to create a public insurance option — but only after hospitals secured higher payment rates than the proposal had initially called for. The public plan's low costs wouldn't be worth much if too few providers agreed to accept it.

What we're watching: Congress and the Trump administration are trying to pull off several reforms that hospitals oppose — including price transparency measures and a federal prohibition on surprise billing that would be similar to California's.

  • And new public insurance plans are central to Democratic presidential candidates' health care plans.

The bottom line: If the state battles are any indication, all of those political battles will be difficult, if not impossible, to win.

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