The Democratic presidential primary has consolidated into a showdown between former Vice President Joe Biden and Sen. Bernie Sanders (I-VT). One of the key issues on which the Democratic candidates are running is health care.
While the progressive gold standard seems to be a single-payer system, there’s a break within the party, with some preferring a more “moderate” approach to reform. Both Biden and Sanders have presented health care plans that would greatly expand the role of the federal government, and increase government spending by billions to trillions of dollars over a decade.
The “Medicare for All” plan put forth by Sanders is estimated to cost more than $32 trillion over a decade, while Biden’s plan is estimated to cost approximately $750 billion.
The Daily Wire recently spoke with health care policy expert Avik Roy about Medicare for All and the Biden plan, as well as what more conservative, free market solutions would look like. Roy is the co-founder and president of the Foundation for Research on Equal Opportunity (FREOPP), which “conducts original research on expanding economic opportunity to those who least have it,” according to the organization’s official website.
In parts one and two of this interview, which you can read here and here, Roy discussed what “Medicare for All” really means, the flaws of such a system, the dangers of the “moderate” counterpoint, and what a conservative solution could look like.
In part three of this interview, Roy discusses hospital monopolization, the real progress conservatives have made on health care legislation, the pressure faced by elected officials to retain the status quo, and more.
DW: Is there a reason that hospitals have been able to consolidate in the way that they have, and how can we break those up?
ROY: The short answer is that both at the state level and at the federal level, the people who have the authority to regulate, to block mergers that create regional monopolies, haven’t been able to do so, for one reason or another. That’s been the first-order problem. The second-order problem is even in the occasional situation where the Federal Trade Commission or related state entities have brought lawsuits, a lot of times the courts have sided with the hospital. They said, “Oh well, you’re a nonprofit hospital, therefore you must be doing the right thing. Nonprofits can do no wrong. You’re not like the greedy for-profit people.” And that’s completely wrong. Just because you are tax-exempt does not mean you can’t be greedy.
“Nonprofit” in that sense is a bit of a misnomer. So-called nonprofit hospitals are among the most rapacious practitioners of monopoly power in the hospital sector. These are huge problems. Every year that these regional monopolies gain more power, they become harder to reign in because the more power they have, the more ability they have to influence their local politicians to do whatever they want. This has become an increasing threat to the living standards of America, the fact that hospitals are charging 8% more for the same stuff that they were doing last year simply because they have the power to do so. They’re just charging more every year. At a certain point, it becomes unsustainable. In fact, it already is.
If you actually look at the share of Americans’ income that they send to the IRS, and the share of Americans’ income that they send to the hospital industry, they send more of their income to the hospital industry than they do to the IRS on average. That is catastrophic. So, that can’t continue. We’re starting to see, on both the Left and the Right, constructive proposals to try to reign in hospital monopolies.
DW: What are the most prominent roadblocks to the implementation of your plan?
ROY: Well, first let’s talk about the progress. There’s actually been enormous progress in terms of developing legislation that reflects these principles. Last year, Bruce Westerman, a congressman from Arkansas, introduced the Fair Care Act of 2019, which is health reform bill that’s based on all of the principles I just described. A new version of that bill is forthcoming in the next several weeks or months that will build on the Fair Care Act of 2019, and potentially attract broader support. So, there’s real progress. There’s actually a bill now that’s online, that people can look at and critique and read and think about and add ideas to. That process has led to this second version of the bill that will be coming out in the next couple of months.
That’s the good news. The good news is that there’s a lot progress being made in turning these ideas into actual legislation that members of Congress can support and advance. As you would expect, the monopolies and crony capitalists who benefit from the current system are going to fight hard at any attempt to curtail their revenue streams. And of course people on the progressive Left are going to oppose plans like this because they strengthen and expand the role of private sector innovation in solving the problems of affordability and access to care and coverage. Those would be the two groups that you could expect to not like this approach – but there’s a lot about this approach that otherwise is pretty attractive.
It’s going to be appealing to a broad segment of the public. In order to pass health reform, it’s really important to remember, we can all throw up on a blackboard our dream system of what we think the health care system should look like, but at the end of the day, if you want to pass reform in Congress, you have to get 60 votes in the Senate. To get 60 votes in the Senate, it’s not going to be an ideological fantasy of what the health care system should look like. You have to have a reform that has enough public support that it can attract 60 votes in the Senate, and that means attracting some Democrats. Not all, but some.
The approach that we’ve designed is meant to do that. It’s meant to say, “This represents a gradual evolution of the system. It does deploy the private sector to do it, but it also achieves goals that moderate Democrats should appreciate, which is more people will be able to afford their health insurance, and there will be fewer people who will be uninsured.”
DW: Republicans don’t seem to be unifying around and really heavily promoting an alternative to what’s being offered by the other side. Why do you think that is? Is it pressure from monopolistic organizations?
ROY: There’s obviously partisan pressure to do partisan things, particularly if you’re running for president in the Democratic primary, or running for Congress in the Democratic primary. You’re going to want to do things that enable you to win that primary, so that’s going to be a more partisan ideological approach. The same is often true, obviously, in Republican primaries. The other piece of it, as you suggested, is that if you want to get elected, it’s easier to get elected if you don’t offend the powerful industry interests that otherwise could run a lot of ads claiming you’re a bad guy or bad gal.
So, don’t make waves, don’t really disrupt the status quo in terms of the crony capitalists, and that increases your chances of winning. The formula is to talk big, but not really actually do a lot to tackle hospital monopolies or other monopolies of crony capitalists, because if you really mean it, then you’re going to have those industry components and sectors against you. That’s what happened with Bernie. If Bernie had been the nominee, he would have elicited a lot of opposition from the industries that make a lot more money under the status quo than they would under Bernie’s plan, in theory.
That’s kind of the dynamic right now, but after the election, we’ll see. If Trump wins, then there are going to be more Democrats willing to come to the table and say, “Okay, we didn’t succeed in getting a Democratic president, but I still want to do work on health reforms. Let’s work together.” If Biden or some Democrat wins, and they’re approach fails to get through Congress, that could also elicit more interest in a bipartisan approach. So, the more partisan approaches have to fail for people to be willing to come to the table. That’s kind of what’s happened with Republicans.
Repeal and Replace failed, so there’s much more interest in what I’m describing in terms of a more gradual evolution to a better system. Similarly, I think the Medicare for All and public option type approaches have to fail for there to be more interest in a bipartisan approach.
DW: Is there anything that we haven’t touched on in this interview that you would want our readership to know about this particular issue?
ROY: Yeah, I would say that we haven’t really talked about what the Trump administration has already done, and what Republicans in the Senate are already trying to do to address some of these issues.
We talked about the Fair Care Act of Bruce Westerman, which is, I think, the most wide-ranging and ambitious and important attempt to achieve free market health reform, but it’s also worth nothing that there are things on a more incremental level that both the White House and the Senate are trying to do that would be helpful. The Trump administration has been trying to do a lot of work on price transparency. That could do a lot to benefit patients and businesses that are trying to keep their healthcare costs down.
The Senate Finance Committee has been doing some important work in trying to reduce Medicare spending on drugs in ways that I think are really constructive. The Senate Health, Education, Labor and Pensions Committee – the Senate health committee led by Senator Lamar Alexander – is trying to do some good work to combat anti-competitive practices by hospital monopolies and others.
So, those are not the total solution, they wouldn’t on their own achieve free market health care, but they’re important reforms that your readers should be aware of and, in my view, get behind.
I’d like to thank Avik Roy for taking the time to speak about such an important issue. For more information, you can follow him on Twitter or visit the FREOPP website here.
