Ted Budd Urges For Strong Oversight 'Standards' In 340B Spending In Hospitals

5 months ago

Earlier this month, Sen. Ted Budd (R-NC) questioned experts on hospital funding and non-profit medical funding standards during a Senate Health Education Labor and Pensions Committee hearing.

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Transcript

00:00Thank you Chairman. The 340B program requires nonprofit hospitals to have a contract with

00:07state or local government to provide charity care for low-income patients. We know that.

00:13The GAO, the Government Accountability Office, found that more oversight is needed to ensure

00:17that these contracts are valid and in compliance with the statute. Dr. Ippolito and the whole

00:23panel, thank you all for being here today. Doctor, what are the potential benefits of

00:28implementing a stronger verification process for contracts to ensure that 340B savings

00:35are allocated to those that are most in need? I think this sort of builds on some earlier

00:41comments, but the sort of lowest hanging fruit it seems to be in this area is that we have

00:45existing policies that are meant to subsidize hospitals and meant to explicitly subsidize

00:50the care of those who cannot pay in full or at all. And so 340B is certainly one of those

00:56and so it strikes me as entirely reasonable to set up some standards and enforce some

00:59contracts about what exactly are you doing with that money. Are those fairly straightforward

01:04verification procedures? My understanding is that there is almost no verification of

01:09what you do with 340B money at this point and so anything that moves in that direction

01:12seems like a step in the right direction. But it wouldn't be overly complicated to create

01:17a system of verification? It doesn't seem terribly complicated, no. It seems like one

01:23of the central problems, not just with that, but with the American health care system is

01:26just that it's not consumer friendly. I face that as a parent, but you know, you've got

01:34some providers out there that are very creative like the Surgery Center of Oklahoma. They've

01:40posted transparent prices. I saw this years ago traveling to India. I think it was Apollo

01:46System. If you want a knee replacement, there's the price. It was basically a menu. You know

01:49the infection rate, you know the statistics for the hospital. People travel from all over

01:53the world there. That's been several years since I was there, but you see innovative

01:58menu like pricing and consumer friendly pricing and systems in Oklahoma. So they've also negotiated

02:05directly with employers and they've reduced administrative overhead and what we've seen

02:10is that it's led to more savings for patients and decreased opportunities for medical debt

02:16to accrue. So how can providers differentiate themselves in the market by offering more

02:22consumer friendly arrangements and better upfront cost estimates for patients?

02:28Yeah, I mean I think this speaks to a broader point. Insurance works best when it is focused

02:32on these rarer expensive conditions that are very hard for people to prepare for. It doesn't

02:38work so great if you're working, if you're covering relatively routine or predictable

02:41or shoppable services and so I think this question is sort of getting at this point

02:45of well can't we do this a little bit more efficiently if we skip all this administrative

02:49cost and you allude to a point that comes up all the time when the CFPB writes on this,

02:54when people submit comments regarding medical debt. The complexity of billing and inaccuracy

02:59of billing is a major issue here and so to the extent that these models move towards

03:03a simpler, more transparent billing model, that seems like a major step in the right

03:08direction.

03:09I like the way you started with that. I think you pointed to the difference between the

03:13promise of health insurance and the promise of health care. Very different. What are some

03:19of the obstacles to more simple consumer friendly arrangements?

03:25Well right now, I mean if you're an insurance plan you have to cover all sorts of mandated

03:28things and the federal government through a variety of regulations essentially dictates

03:33some essentially minimum coverage requirement that's the federal and state governments have

03:38roles in that and the more you do that, the more that you make it kind of challenging

03:43for anybody to deviate. It also, I will note, tends to preference the largest players. If

03:48you are a big player and you put handcuffs on anybody else from making a different product

03:52that somebody might be interested in, that tends to help you maintain your market share.

03:56So those are the things I would point to.

03:58Any other ways that you can think of off the top of your head where government is the obstacle

04:03rather than the solution when it comes to health care providing?

04:07You know, I think one of the big things that Dr. Byer brought up is the government often

04:11has well-intentioned policies that has unintended consequences that we are very, very slow to

04:17unwind. Things like Medicare policy that encourages consolidation and higher Medicare spending

04:22is a great example. 340B tends to push in that direction as well. So I think those are

04:27sort of first order issues for me. Government policies that tend to push towards consolidation

04:30and higher costs that underpins all of the conversations we have about medical debt and

04:34related issues.

04:36Thank you very much. Thank you all. Chairman, I yield back.

Ted Budd Urges For Strong Oversight 'Standards' In 340B Spending In Hospitals

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