Health Subcommittee Chair Guthrie Opening Statement on Lowering Costs with Transparency and Competition
Washington, D.C. — Subcommittee on Health Chair Brett Guthrie (R-KY) delivered the following opening statement at today’s Health Subcommittee hearing titled “Lowering Unaffordable Costs: Legislative Solutions to Increase Transparency and Competition in Health Care.”
Excerpts and highlights below:
BIPARTISAN WORK TO LOWER COSTS FOR PATIENTS
“We are here today because health care costs continue to rise, further limiting American’s budgets that have already been stretched thin by inflation driven by the spending in the last couple of years.
“We are considering 17 bills and discussion drafts to advance price transparency and improve competition within the health care system to ultimately lower costs.
“This legislative hearing builds on our bipartisan work last month.
“In our educational hearing, we heard from experts and witnesses from across the political and policy spectrum who share our goal to lower costs for patients.
“Republicans and Democrats on this committee are reaching across the aisle to advance solutions, and these bipartisan efforts can be seen in many of proposals before us today.
“Transparency can reveal the true value of each step in the health care supply chain and empower patients and employers to get the best deal on high quality care.
“Many of the proposals before the subcommittee today will shine a light on prescription drug middlemen and further polices to make the health care system more competitive to lower costs.”
THE NEED FOR COMPETITION TO LOWER PRICES
“The Transparent PRICE Act, introduced by the leaders of the full committee, will help build upon the Trump administration’s hospital and insurer price transparency rules to ensure patients and employers are getting the best possible deal.
“While transparency is necessary for a functioning market, there must also be competition to lower prices and increase quality.
“As such, we are reviewing a number of policies designed to reduce incentives to consolidate and require providers to compete with one another on both price and quality—all with the goal of benefiting patients.
“For example, today we will examine a number of proposals that would ensure patients aren’t paying more for the same services in one care setting versus another.
“I look forward to hearing what the impacts of these policies could be for patients; both in the quality of care they would receive and how these would impact their out-of-pocket spending.
“One proposal, recommended by MedPAC, would save $1.7 billion annually.
“Similarly, another policy would simply require CMS to assess the impact that regulatory decisions may have on consolidation in health care to see if federal regulations may be unintentionally driving consolidation.
“Improving competition will help ensure seniors maintain access to the highest quality health care services at the best possible prices.”
ADDRESSING THE MIDDLEMEN RAISING HEALTH CARE COSTS
“Another theme repeatedly heard during last month’s bipartisan educational hearing is the need to address pricing practices by pharmacy middlemen.
“Patients are facing rising costs at the drug counter, resulting from the growing influence of a small number of pharmacy benefit managers.
“Due to consolidation within the PBM industry, 80% of all drug claims are adjudicated by three PBMs. It is this subcommittee’s duty to ensure this consolidation is driving value and improving outcomes.
“That’s why I strongly support the bipartisan PBM Accountability Act to provide key information to employers about the drug costs in the coverage for their employees.
“With that information, employers can truly know what benefit their PBM may be providing.
“There’s also bipartisan legislation from Representative Carter that would finally ban spread pricing in Medicaid.
“In 2019, it was reported that PBMs earned $123 million in Kentucky alone through spread pricing.
“Medicaid programs should find a more transparent way to pay PBMs for their services.”
BIPARTISAN WORK WITH RANKING MEMBER ESHOO
“Finally, I want to thank Representative Eshoo for working with me on the MVP Act.
“The innovation coming the next few years is game changing—including potential one-time cures for rare diseases, sickle cell, and hemophilia.
“However, the Medicaid system is not set up to pay for high-cost treatments.
“Medicaid programs operate on an annual budget and need more flexibility to help ensure patients gain access to these therapies.
“This bipartisan legislation builds on a Trump administration regulation that would give Medicaid programs the flexibility needed to pay overtime and enter into contracts that provide patients with access to novel cell and gene therapies.
“This payment model also ensures states aren’t on the hook to pay for treatments that fail patients.
“In closing, I look forward to today’s hearing to discuss these bipartisan ideas to lower health care costs and look forward to working with my subcommittee colleagues to advance these policies.”