Americans are worried about rising healthcare costs leading up to the midterm elections, with affordability ranking high on the list of voter concerns. It’s the perfect time for Republicans to seize the moment and enact healthcare reforms during their third reported “Reconciliation 3.0” megabill that they hope to pass before November.
As Dr. Raymond Kordonowy, Fort Myers-based physician, writes in his op-ed in the Washington Examiner, Republicans should look to reform a key driver of inflated health costs during budget reconciliation: a discrepancy in how Medicare pays for hospital care. "Federal rules allow a hospital outpatient department to receive higher reimbursement than an independent physician office for identical services, even when quality, complexity, and patient risk are the same." Medicare will reimburse two to four times the amount for hospital care compared to an independent physician’s care.
The solution? “Site-neutral payments,” policies that require hospitals to charge the same price for Medicare treatment as independent doctors. Stabilizing payments between hospitals and the government could cut millions in wasted healthcare spending while ensuring that hospitals charge prices that match those on the open market.
Dr. Kordonowy explains just how expensive hospital care can be.“Routine outpatient services can cost two to four times more when performed in a hospital outpatient department instead of a physician’s office. Cancer patients are hit especially hard. One recent analysis found that site-neutral payments could save many Medicare cancer patients more than $1,000 in out-of-pocket costs during the first year of treatment while saving Medicare more than $5,500 per patient on average.”
This payment gap drives hospital conglomerates to buy up smaller practices to capitalize on these high reimbursement rates. As hospitals consolidate more, healthcare centers close, and prices of care rise as options decrease. What Dr. Kordonowy describes next is how Congress must reckon with the role of hospitals in our healthcare system.
“This does not mean hospitals are obsolete. True hospitals remain essential for trauma, surgery, intensive care, unstable sepsis, complex procedures, and emergency standby capacity. But it does mean Congress should stop confusing the building with the care. The hospital is not the therapeutic ingredient. Too often, it is simply the invoice.”
Reconciliation 3.0 gives Republicans a rare opportunity to turn a popular healthcare reform into law. Site-neutral payments align directly with the GOP's stated goals of reducing waste, lowering federal spending, and making healthcare more affordable. The reform would eliminate a government-created pricing distortion that rewards consolidation, inflates costs for patients, and forces taxpayers to subsidize higher hospital reimbursements for the same services.
“Republicans are searching for savings to offset other priorities while telling voters they are serious about reducing waste, fraud, and overspending. Because reconciliation bills can pass the Senate with a simple majority, a reconciliation 3.0 package may be the clearest opportunity this year to act. Site-neutral reform fits the promise perfectly. It cuts a government-created overpayment, lowers costs for patients, and challenges the hospital lobby’s regulatory advantage.”
Patients should pay for the care they receive, not for the logo on the building where it is delivered. If Republicans want to show voters they are serious about lowering healthcare costs before the midterms, site-neutral payment reform offers a straightforward test: reduce prices, save taxpayer dollars, and stand up to powerful special interests.
You can read the full op-ed in the Washington Examiner here.
