Lowering Health Care Costs for All Americans: An Examination of the U.S. Provider Landscape
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House Energy and Commerce Subcommittee on Health U.S. House of Representatives
Follow its sittingsSpeaker 2
This is exactly what HR1, the big bad bill, did. It cut over 1 trillion dollars for Medicaid, which will make it even harder for sick kids, people with disabilities, and working class Americans who are trying to get by. And by failing to extend the enhanced advanced premium tax credits for people who get insurance on the exchanges, people who are just starting out, people who work for small businesses, retired adults who aren't quite Medicare age. Republicans jacked up insurance costs for millions of Americans and cut insurance coverage for millions more. But it's not just the people who lost or will lose their insurance who are paying the price.
In many communities across America, urban and rural, access to quality care is literally hanging by a thread. People who are uninsured don't just magically not need care, but they do tend to delay care, letting conditions get worse, and then getting costlier healthcare, which they often can't pay for, leaving hospitals and taxpayers with the bill. And the hospitals that are here today know exactly what I'm talking about. Seventy-five percent of uninsured adults say that they skipped or postponed healthcare they needed in the last year because of cost. While uninsured patients may not be able to afford life-saving care, hospitals are the ones who are obligated morally and legally to provide it, and then they have to shoulder the costs themselves.
That uncompensated care is expected to increase by $443,000,000,000 nationwide in the next decade because of Medicaid cuts in the big bad bill, placing hospitals under incredible financial stress, and forcing many to reduce staff, eliminate certain services, or even close. And as many as 300 rural hospitals across the country may close their doors due to these pressures. I've talked a lot to the Colorado Hospital Association about this. This will increase wait times, make care less accessible, and raise the cost of healthcare for everyone regardless of insured status. And it will also devastate the economies of those small communities where the hospitals are the lifeblood.
So, what should we do now? First, as I've said before in this room, we need to restore the enhanced premium subsidies for health insurance. We need to rip out the health care provisions of HR1, root and stem. That'll go a long way, but it's just a start. In my opinion, ultimately, the best way to achieve affordable, accessible care for every American is to build a single-payer system like Medicare for All.
We need to guarantee that in the US, no matter who you are, no matter where you live, you have access to health care that's gonna be there to prevent illness when you're well and get better when you're sick. We also need to recognize where factors outside our health care system impact health and address public health safety holistically as a whole of government and indeed a whole of society effort. The finest doctors and hospitals in the world can't replace healthy food and clean air. I'm not optimistic about tackling these important issues under this majority. But to my colleagues on the other side of the aisle, if you want to work on these issues in a bipartisan way, my door is always open.
But we're not gonna pass legislation. I call it fig leaf legislation. You've heard me say it before. We're not gonna pass fig leaf legislation and say we passed this problem when my constituents continue to get sicker and be unable to afford their health care. We will continue to work on issues, if we can, in a bipartisan way that are gonna improve health care quality and reduce health care and reduce costs, and all are welcome to help us.
I yield back.
Speaker 1
Gentle lady yields back. I now recognize the esteemed chairman of the full committee, Mr. Guthrie.
Speaker 3
Thank you. Appreciate our witness, Sabrina. Thank you, Mr. Chairman, for holding this hearing. And I wanna talk about why we're here. One, people have to afford health care.
That's absolutely true. And I disagree with my friend from Colorado that the answer to this is a single payer system, then you don't get I don't think you can look at a system that delivers quality health care that has that system. I will also say that the expense in the health care system, the Affordable Care Act, is still the law of the land. And so when we're dealing with the rising cost of health care, that's the law of the land. But let me tell you why we're here, and I'll tell you why we're here.
I'm gonna talk about my favorite constituent. So she said I could use her information as my wife. So we've been very blessed to have a very healthy time until just recently. She had a think about this, this is why people are frustrated. This is what we're hearing from everybody.
This is the system we have today. So my wife was trying to pass a kidney stone. It got impacted, so we had to go to the hospital, have a kidney stone removed. I take her at 6:00 in the morning, leave at noon. And, a couple days later, a few weekdays later, we get a bill that says, your stay at the hospital for less than six hours was $28,000.
$28,000. It said your bill was $28,000. Your health insurance paid $27,500, and you're paying 500. So we pay $500. We pay $1,500 a month for the insurance we have.
People think that members of Congress get free insurance. We pay $1,500 a month for it, deductibles, co-pays. So think about that. $28,000 for six. And we had a good doctor, wonderful doctor, wonderful person, but we're trying to figure out why was it 20, you can't figure out why was it $28,000.
You can't figure it out. So then the second thing is, unfortunately, she slipped on the ice when we had our ice storm in Kentucky and put her shoulder out of socket and broke the upper part of her arm, goes to emergency room. Few days later, we get a call from a debt collector. Now last time we got a loan for anything, the guy looked at us, y'all have the highest credit score I've ever seen. Matter of fact, he goes, I was one point behind her.
Don't know why it wasn't the same, because they're all tied together, and she had bragging rights. She had a higher credit score than me by 1 point. So we pay our bills. We have the means to pay our bills. We pay the $1,500, and we want it.
So we have the means when we have, we get a call from a debt collector. When she went to the emergency room, my son-in-law took her because I was here, and he didn't have the insurance information. She couldn't give the insurance information. So it seems like that the provider who could have called us because they obviously knew who we were because they turned us in a debt collector, didn't even reach out. Fortunately, not many of my constituents can do this.
I have the CEO's cell number. K. Gave him a phone call because, oh, they didn't have your insurance information. Well, my wife was, like, in excruciating pain. He goes, well, let's run it through and see what can happen, and then we'll just run it through insurance.
So think about the system that people deal with. So yesterday, I had a prepared statement, but then I changed it because yesterday, we got this text from my wife sends me a text from MetaCredit. I don't know who MetaCredit is, but they're from Chicago. And they sent us a letter. And first, we thought it was a scam.
It was so absurd. And, we start looking online, and I don't know who Medicredit is, but if you start reading their comments online, you would think it's a scam company. But it seems like they're legitimate. And it says, and I'm reading, as of February 6, you owed $834.60. Between February 6 and today, you were charged zero interest.
You were charged zero fees. You paid your insurance, and you were credited for this amount, negative $1,947.40. So you now owe $272,782. So what we owe was $800. We didn't know we owed because we never got a bill.
Now it's doubled, so it's tripled what it originally was, and we never received the bill. So the providers turned us into a debt collector without ever informing us of the bill that we have. So I hate that this happened to my wife. I hate that my wife has been through this, but I'm glad that I've experienced it because I was committed to transparent competition in health care. And I am telling you, I am committed not just to moving a bill.
I'm committed to getting it done because a lot of people aren't in the position that I am in and have the opportunity to try to work through this with the CEO of the hospital to say, why in the world? My wife's worried about her credit rating that she's taken great pride in, but she says it's one point higher than me. She's worried about it, it's just absolutely frustrating that a six hour procedure costs $28,000. And then you go to the emergency room, and the provider makes no effort to try to run you down. Say, alright.
You're gonna pay your, that obviously knew who we were. And so now we're dealing with a debt collector that, if you read their comments, MetaCredit, read about them online. They're, a lot of people have had really bad experience with them. So we're gonna deal with this. We're gonna fix it, and I'll yield back.
Speaker 1
Gentleman yields back. That's what Americans are facing across the board, and all of us have a story. I now recognize the ranking member of the full committee, Mister Pelon of New Jersey, for his five minutes for an opening statement.
Speaker 4
Thank you, Mr. Chairman. Committee Republicans are holding yet another hearing that is purportedly about lowering health care costs for all Americans, and yet they continue to actively make the affordability crisis of their own making even worse. Republicans are hoping the American people will forget that last year they cut more than a trillion dollars from the Affordable Care Act, Medicaid, and Medicare with their big, ugly bills so they could give giant tax breaks to billionaires who don't need them. And now, of course, when I'm home, my constituents are saying that these health care cuts are helping pay for an irresponsible war in Iraq. And they are right.
And they say that instead of paying billions of dollars a day for an irresponsible war in Iran, we should have taken that money and used it to help people with their health care and give them the premium tax credits. And they're right about that too. These cuts that the Republicans are making mean that 15 million people are losing their health insurance, and tens of millions more saw their out-of-pocket costs skyrocket at the beginning of this year. And instead of doing something to help the situation like unwinding the cuts or extending the ACA enhanced premium tax credits, Republicans are holding affordability hearings in an attempt to show that they care. Well, it's nothing but talk.
As Americans watch the doctors' offices and hospitals and the community shut off critical services like labor and delivery or even close their doors altogether, congressional Republicans are doing absolutely nothing to fix the problem. And worse yet, Republicans and the Trump administration are doubling down on the big, ugly bill and making even more health care cuts. After Republicans refused to extend the ACA tax credits that would have made comprehensive health care more affordable for about 20,000,000 low and middle income Americans, the Trump administration has now proposed new rules to increase costs even further by proposing to increase the amount that insurance companies charge people. The administration's proposed rule would raise deductibles for many families with ACA policies to $3,200. That's as much as 75% of the household income for many of the people eligible to purchase this coverage.
So now they have these huge deductibles in addition to the premium increases. And that means for the health care provider sitting in front of us today, that uncompensated care is going up even more because Americans are simply not going to be able to afford insurance and will be forced instead to once again rely on emergency rooms for care. And Republicans have wanted to take us back to the days before the ACA. Sure. The chairman said the ACA is still out there.
But if you can't buy the policy or you can't afford the deductible, you're going back to the days when there was no ACA, where Americans were skipping care that they need and instead come to health care providers sicker and more desperate, and it's going to leave millions of Americans buried in medical debt. That's the other thing that will force even more providers to close their doors. And the Trump administration and Republicans are doubling down on Medicaid cuts. Also, we heard this yesterday in the hearing. In their latest crusade, the Trump administration has acted to withhold and defer about 30% of all federal Medicaid funding to Minnesota, cutting funding for home and community-based care that seniors and disabled people, including disabled children, rely on to live healthy lives in their communities instead of being institutionalized.
Substance use disorder services will also be cut, that help people recover. Support services for children with autism will also be cut. But this isn't just in Minnesota. Doctor Oz and vice president Vance have made clear that they are on a state-by-state crusade to cut funding for services that seniors and people with disabilities rely on, and the committee Republicans are simply piling on, sending their own letters attacking Medicaid funding for similar services in 10 states. So I would ask, mister chairman, unanimous consent to insert into the record letters from organizations representing seniors, people with disabilities, and people with substance use disorder who rely on these services, begging Republicans to stop this assault on their health care.
If I could ask unanimous consent to include those records, those letters in the record, mister Trump.
Speaker 4
To say I am tired of Republicans using these hearings as an attempt to show they care about health care affordability when they created this health care affordability crisis in the first place, and are making it worse. You're not fooling the American people. They know Republicans are to blame for skyrocketing health care costs, millions losing their coverage, and hospitals closing their doors. You know, I have to say, I didn't even realize that a hospital in New Jersey could be a hospital and not deliver babies or provide pediatric care. But that's what's happening.
If they're not closing, they're cutting back on essential services. And with that, I yield back the balance of my time, Mr. Chairman.
Speaker 1
Gentlemen, yields back. We now conclude with members' opening statements. The chair would like to remind members that pursuant to committee rules, all members' opening statements will be made part of the record. We wanna thank our witnesses for taking the time to testify before the subcommittee. Although it is not the practice of this subcommittee to swear in our witnesses, I would remind our witnesses that knowingly and willfully making materially false statements to the legislative branch is against the law under title 18, section 1001 of The United States code.
You will have the opportunity to give an opening statement, followed by questions from members. Our witnesses today are Richard Pollock, president and CEO of the American Hospital Association, David Azeus, chair of the board of trustees of the American Medical Association. Sean Martin, executive vice president and CEO of the American Academy of Family Physicians. Elizabeth Mitchell, president and CEO, purchaser of the business group on health. Anthony de...
Sorry, DeGiorgio, neurosurgeon at University of California, San Francisco Health, and Barbara Merrill, CEO, American Network of Community Options and Resources. Per committee custom, each witness will have the opportunity for a five-minute opening statement, followed by a round of questions from members. The light on the timer in front of you will turn from green to yellow when you have 1 minute left. I now recognize Mister Pollock for his five minutes to give an opening statement.
Speaker 5
Chairman Griffith and Guthrie, ranking member DeGed and Pologne, and the members of the subcommittee, thank you for the opportunity to be here today. America's hospitals and the women and men who care for patients and families every day are truly the backbone of the nation's health care, and one of the key elements of our national critical infrastructure. Think about the role that hospitals play. They are there in the very first moments of life, supporting newborns and families. They are there at the end of life, providing compassionate care when it's needed most, and they are there for patients in countless moments in between, caring for the injured, sick, and keeping people healthy.
That blue and white H sign that we see on the side of the road is iconic because it represents hope, healing, and refuge. It says follow me because of the promise that skilled around-the-clock care is close by. That responsibility is enormous, it's part of what makes hospitals unique in our health system. Now let me be clear. America's hospitals and health systems are deeply committed to providing high-quality, accessible, and affordable care.
And across the country, hospitals are increasing efficiencies, adopting innovative technologies, and rethinking how they deliver care. Many are investing in preventive care and care coordination programs that help patients better manage chronic disease and avoid unnecessary hospital visits and stay healthier at home. These efforts improve outcomes, and they help lower costs for patients, families, and the entire health system. Hospitals are also using new technologies to make care more affordable and more convenient. Telehealth, remote monitoring, and digital tools are helping patients access care in ways that fit their lives.
Electronic health records and data-driven care models help clinicians catch problems earlier, avoid duplicative tests, and coordinate treatment more effectively. At the same time, science and technology are unlocking possibilities that were once unimaginable, and hospitals are where breakthroughs become real, and we turn discovery into healing. But we also know there's more work to be done. As we talk about lowering costs and protecting access to care, it's important to understand the environment hospitals are operating in, and the pressures they're facing. Now hospitals are different from other parts of the health care system as they support a wide spectrum of services.
Emergency care, inpatient care, surgery, diagnostics, operating simultaneously. They have substantial fixed costs to maintain specialized services, high-cost equipment, and a fully staffed twenty-four-seven environment that remains ready for anything ranging from tornadoes to hurricanes to wildfires to floods to mass shootings to other large-scale emergencies, including the unthinkable. As a practical matter, hospitals are the public health system in many communities, and society's ultimate safety net. We have seen time and time again that when America has a crisis, it turns to its hospitals. Hospitals today are balancing rising costs across the board, many of which are completely outside of our control.
They're treating sicker, more medically complex patients, and all of this is happening in a payment system that is increasingly misaligned with the realities of delivering care, particularly the government reimbursement that is less than the cost of providing care. And I wanna give you a few examples. In 2025, hospital spending on medical supplies, equipment, and technology increased 10%, and that includes lifesaving devices clinicians rely on every day, not to mention significant investments in cybersecurity. Hospital drug expenses rose more than 13% in 2023, driven by rising prices and the introduction of new high cost therapies. About 60% of a hospital's expenses go to paying their talented workforce, and those costs are increasing 5.6% per year.
Overall hospital expenses increased 7.5 percent last year, while hospital prices rose only 3.3%. And this is despite the fact that as a percentage of the GDP total health spending, hospital services have remained relatively stable for decades. Hospitals, patients, and caregivers also face growing administrative burdens from large commercial insurers, delays, denials, and disruptions in care that add enormous cost and keep clinicians from caring for patients. And we can't ignore what's ahead. Hospitals are preparing for reductions in federal Medicaid funding and changes to the health insurance marketplaces.
This will further strain resources and increase the number of uninsured and underinsured patients. That means more families turning to already overburdened emergency departments for basic care, as we become the family doctor to the uninsured. This results in clogged emergency departments and inevitably longer wait times, which impact not just Medicaid patients and the uninsured, but everyone. In conclusion, in my written testimony, you'll see several specific solutions that can meaningfully improve value and affordability. And they focus on four areas: improving the health of individuals and communities, advancing value through care transformation, reducing regulatory barriers, and administrative waste in driving innovation.
We look forward to working with you and all stakeholders to advance solutions, and thank you for the opportunity again, mister chair.
Speaker 1
Thank you, gentlemen, for yielding back. Now recognize Dr. David Azuz. Hope I said it right. Pretty close. Well, tell us how to say it so everybody else gets it right, even though I didn't.
Speaker 6
So thank you, Chairman Griffith and Ranking Member DeGet, Chairman Guthrie, Ranking Member Polon, and members of the subcommittee for having me here today. My name is David Azas. I'm a board-certified ophthalmologist with an independent ophthalmology practice in Encino and West Hills, California, and the chair of the board of trustees of the American Medical Association. Physicians want to care for all patients and ensure a healthy country. Congress can aid in this mission by recognizing that affordability is inseparable from access and promoting policies that ensure consistent, reliable, and locally accessible physician care.
Challenges surrounding patient access to physicians and health care affordability are multifaceted. They include market consolidation, inadequate physician payment, burdensome prior authorization rules, coverage instability, and physician workforce shortages. The consequences are severe. Independent physician practices are closing. Burnout remains high, and too many patients cannot find timely physician care in their communities.
We are seeing a rapid transition away from independent physician practices into higher-cost settings. This drives up spending for both families and federal health programs. In my community, I am having difficulty finding primary care physicians willing to accept new Medicare patients. In fact, many physicians are charging patients an annual fee to enroll in their practices in order to keep their doors open. Congress can take several meaningful steps to shore up physician practices, stabilize patient access, and lower prescription costs across the system.
First, Congress should prioritize Medicare physician payment reform. Stabilizing Medicare physician practice payment is one of the most direct ways that Congress can protect patient access to care and counter further consolidation in the health care market. Physician payment has declined by 33% when adjusted for inflation since 2001, while practice costs have continued to rise. The solution starts with preventing the 2.5% Medicare cuts scheduled for 2026. Even small cuts have significant consequences for patient access.
In addition, Congress should reform Medicare's outdated budget neutrality requirements to stop the annual cuts. Next, Congress should establish a real inflation update tied to the Medicare economic index to reflect rising staffing, technology, and compliance costs. Moreover, Congress must reform MIPS to ensure that small, rural, and independent practices are protected from the steep 9% penalties and ensure physicians receive timely performance data. Second, Congress should reduce administrative and regulatory burdens that take physicians away from patient care. Physicians are wasting too much time dealing with paperwork, rather than caring for patients.
Prior authorization and complex federal reporting programs take time, add cost, and delay patient care. Congress should pass the Improving Seniors' Timely Access to Care Act, and reform the Medicare MIPS quality reporting program. Third, Congress should promote competition and expand patient choice. Consolidation can negatively affect both cost and access, and Congress should ensure the viability of independent practices. In addition, we need to remove existing federal restrictions that prevent physicians from opening or expanding physician-owned hospitals.
Congress should increase competition and patient access to care by passing legislation such as the Patient Access to Higher-Quality Health Act. Fourth, Congress must address the growing physician workforce shortage, which is currently projected to hit 86,000 by 2036. Fifth, as changes to Medicaid move forward, Congress and the administration should focus on the implementation that protects eligible patients from falling through the cracks. The AMA is committed to helping ensure that eligible patients maintain health coverage and access to physician care. We encourage preserving coverage stability, while also ensuring that physicians can sustainably participate in the program and care for our Medicaid patients.
In addition, implementation should minimize barriers for patients. America's physicians are committed to their patients. We stand ready to work with you to build a system that keeps practices open, that patients are cared for, and that costs are under control. Together, we can get this right, and we must. Thank you, and I look forward to the committee's questions.
Speaker 8
Thank you so much, Congresswoman. Chairman Griffith, ranking member DeGat, chairman Guthrie, ranking member Polone, and members of the subcommittee. Thank you for the opportunity to appear before you today on behalf of the American Academy of Family Physicians. The AFP proudly represents over 124,000 family physicians providing comprehensive care for patients of all ages in over 95% of the US counties. Thank you for the opportunity to share thoughts on why health care has become more unaffordable, and to offer ideas for how we might reverse these trends and help individuals achieve better physical, mental, and financial health.
We as a population are unhealthy. Decades of policies have made primary care less accessible and affordable, and this has resulted in consequences. Higher prevalence of chronic disease, declining vaccination rates, low utilization of prenatal services, and growing numbers of unmanaged behavioral and mental health issues, to name a few. Our system will spend trillions treating and managing chronic disease, yet we will invest comparatively little in prevention and primary care. And primary care is not affordable.
An annual primary care for one year is often less than one visit to the emergency room or one day in a hospital. I suggest that the most effective way to lower health care costs for individuals and for our system as a whole is to improve the health of our population. And the best way to improve the health of our population is to strengthen primary care. Studies consistently show that primary care is the only area of health care that improves health outcomes while reducing costs on a per-capita basis. And, sadly, the number of Americans who have a usual source of primary care has decreased over the last decade.
These trends are certainly a byproduct of consolidation, but also reflective of insurance design that has placed financial barriers between patients and primary care, particularly in the form of high deductibles and cost-sharing. There have been meaningful bipartisan efforts to invest more resources in primary care over the past decade, including many by this committee. I would specifically acknowledge the important policies advanced by CMS this past year as part of the Medicare physician fee schedule. This type of leadership and these types of policies are consistent with our recommendations. Physicians are at their best when they are serving patients and communities, and not the financial interest of an employment or investment partner.
Over the past two decades, we've seen a dramatic shift in practice ownership. Today, nearly 75% of family physicians are employed by hospitals or other entities. Twenty years ago, that number was closer to 35%. This shift has occurred for several reasons. First, insufficient and unstable payment policies from all payers, including Medicare, have placed increasing economic pressure on physician practices.
Independent practices often lack the market leverage needed to fairly negotiate payment rates with insurers. And the increasing burden associated with quality reporting, utilization management, and practice improvement has increased the cost of operating an independent practice. While private equity is often viewed unfavorably, I would suggest that many of the business tactics associated with private equity are not materially different from those employed by hospitals or care delivery systems owned by insurers. Each seeks control over diagnostic, treatment, and referral decisions within primary care in ways that serve the financial interests of the parent organization, rather than always aligning with the interests of the patient. We are also concerned with misaligned incentives within vertically-integrated insurance organizations.
Medical loss ratio requirements were designed to ensure that most premium revenue is spent on medical care. However, as insurers have acquired physician practices, the lack of transparency has made it difficult to determine how much premium revenue is actually supporting patient care versus profits. I would offer six recommendations for your consideration. First, double the nation's financial investment in primary care and the primary care physician workforce. Two, reform our flawed Medicare physician payment system to more appropriately value the actual patient care done by physicians and not just the facilities in which they work.
Three, establish regulatory frameworks that support independent physician-led models, specifically direct primary care. 4, create space for physicians to focus on patients by reducing the administrative complexity of the modern medical practice. 5, remove financial barriers to primary care. And six, promote proven evidence-based interventions, including vaccines in our system. I will conclude with two thoughts.
Health care consolidation has led to higher costs, decreased access to care, and universal frustration. And to truly reduce the cost of health care, we must invest in health, and health starts with primary care. Thank you for the opportunity to be here today, and I look forward to your questions.
Speaker 7
Thank you, Mr. Martin. And now, Miss Mitchell, you're recognized for your five minutes.
Speaker 9
Thank you, Chairman Guthrie and Griffith, ranking members Pologne and DeGet, and members of the committee. Sincere thanks for the opportunity to testify today and the ex to share the experiences of large self-insured employers and public purchasers of health care as they seek to reduce health care costs, improve quality, and increase access and affordability for their employees. Over 180,000,000 Americans receive health insurance coverage through their employer, and they rely on the commercial market to ensure that care is affordable and high quality. However, that is increasingly difficult. Soaring costs quickly turn a medical emergency into a financial disaster.
Affordability for American workers is reaching a crisis point. My name is Elizabeth Mitchell. I run the purchaser business group on health. We are a nonprofit coalition of jumbo self-insured employers and public purchasers, collectively spending over $350,000,000,000 annually purchasing health care for about 25,000,000 Americans. PBGH facilitates employer-led innovation in the commercial market, and for nearly 40 years, we have worked directly with purchasers and health care providers and practices to improve quality and affordability through active purchasing strategies and actions.
Our members have implemented employer-led innovations that deliver real results, including joint HMO purchasing that reduced premiums by over 9 percent, advanced primary care initiatives that saved hundreds of millions of dollars, and avoided tens of thousands of hospital admissions. And we have also done some of the nation's earliest centers of excellence programs that dramatically improved outcomes and cut costs. More recently, we have worked to combine price, quality, safety, and claims data to support value-based purchasing. In short, we know what it takes to deliver high-value care, and we appreciate this committee's leadership on affordability. However, while employers and purchasers are leading the way on innovation, policy intervention is necessary to address the anti-competitive business practices and restore a functional market.
The health care industry has been largely unresponsive to the concerns of employers and patients, erecting barriers to access and affordability, and stymieing innovation. When this happens, American businesses, workers, and their families are the ones left holding the bill. And the committee should be crystal clear. Self-insured employers and workers are paying these health care costs. Health plans simply administer payment with other people's money, keeping a large portion for themselves.
But this is money coming out of businesses and wages. But there is good news. We know what works. Evidence-based strategies can improve care while lowering costs if they are scaled and supported. Based on our experience, we urge three priorities.
First, ensure meaningful price and quality transparency, so that purchasers and patients can make informed decisions. Second, redirect resources to underfunded high-value care, including primary care, maternity care, and mental health. And third, stop the anticompetitive business practices enabled by consolidation, and strengthen policies like site neutral payment and anticompetitive contracting reform that restore competition and accountability. Employers have demonstrated that they are prepared to confront the health care cost crisis, but they cannot do this work alone. By advancing these reforms, Congress can directly improve affordability and quality for more than half of the country through market-based solutions.
Thank you for the opportunity to testify and for the committee's leadership on health-care affordability. We look forward to working with Congress to advance transparency, competition, and market-based solutions that lower costs and improve care for American families.
Speaker 7
Thank you, Miss Mitchell. And now I'll recognize Doctor DeGiorgio for his five minutes.
Speaker 10
Thank you, ma'am. Chairman Griffith, vice chair Harshberger, ranking members Toomey and Pologne, members of the subcommittee, thank you for the opportunity to testify today. I'm Anthony de Giorgio. I'm a practicing neurosurgeon at the University of California in San Francisco, and the views I express here today do not necessarily represent those of UCSF. I clearly don't need to belabor the points about health care affordability.
If we're serious about fixing this, we must look squarely at consolidation and the policy choices that have accelerated it. And I want to be clear. The answer is not weaker hospitals. We need strong hospitals for emergency care, trauma care, teaching, transplant services, and true safety-net functions. I work in that world, and I believe in that mission.
But we also need a strong, independent physician sector. Independent physicians and physician-led facilities are one of the last practical checks on consolidation in American health care. They preserve patient choice, create local price competition, and maintain accountability through direct patient physician relationships rather than through distant corporate hierarchies. Yet, over time, regulations have eroded the ability of independent doctors to maintain their practices. Just like any industry, this consolidation has led to significant price increases.
Hospital acquisition of independent practices and vertical integration are associated with higher prices and higher Medicare spending, along with lower wages for nurses and other workers. And despite the usual promises, the evidence does not show that consolidation reliably improves quality. Congress must revisit policies that have restricted physician-led entry. Section 6001 of the Affordable Care Act essentially prohibited new physician-owned hospitals. This has removed one of the few physician-led entries that could have checked consolidation.
However, there's ample evidence that physician-owned hospitals provide high quality care. They're consistently ranked among the highest-quality hospitals while improving access in underserved communities. That alone is enough to justify repealing section 6001. Additionally, Stark law acts as though every physician-led ownership arrangement is presumptively suspect. Independent physicians should be able to build lawful ancillary capacity, participate in joint ventures, and coordinate care without hiring a battalion of lawyers just to understand whether ordinary business planning is allowed.
If policymakers are worried about weak utilization control in fee for service, a legitimate concern given the levels of fraud that are coming to light, an exception to Stark law could be made within a managed care setting. Section 6001 and Stark create an untenable double standard. Corporate health systems are granted broad safe harbors that allow them to anticompetitively steer referrals within their system. Why should independent doctors be subjected to prohibitions on self-referrals when corporations are not? Additionally, CMS pays vastly different amounts for the exact same clinical service depending solely on the ownership structure of the building where the service is rendered.
This structural flaw transforms health care delivery into a massive exercise in payment policy arbitrage. As an example, MedPAC showed that an echocardiogram is reimbursed 194% more in a hospital than in a freestanding office. An independent medical practice is often worth significantly more to a corporate hospital system than it is to the independent physician owner, due to the site of service differential and the captured downstream referrals. For a truly independent practice, Medicare compliance is a substantial burden. For example, just to report CMS's mandatory quality metrics, outpatient physicians spend about two and a half hours weekly on reporting, and nonphysician staff spend another 12 and a half hours.
Additionally, Medicare's conditions of participation actively prohibit price transparency. Under current rules, physicians are not allowed to offer cash prices to Medicare beneficiaries. These prohibitions stifle the ability of physicians to innovate on payment design, creating transparent upfront pricing mechanisms that would empower patients. That all-or-nothing structure makes patient-centered payment innovation harder than it should be. Moving towards flexible private contracting and payment models is preferable to simply applying another fix to the physician fee schedule.
But as long as Congress keeps physicians inside a prospective payment system, it should at least stop using that schedule in a way that destabilizes independent practice. The system effectively starves independent practices of revenue while burying them in paperwork, making selling to the hospital the only viable way out. Congress must also confront the distortions and abuses in the 340b drug pricing program. The availability of 340b discounts to hospital child sites but not independent practices creates yet another means of financial leverage for hospital systems to acquire clinics. Congress should use the power of the Medicaid matching percentage to incentivize competition in the states.
States that continue to protect incumbents through certificate of need laws, broad physician noncompetes, and pro consolidation state-directed payments or other barriers to physician-led entry should not receive the same federal matching treatment as states that permit real competition. We need a thriving independent physician sector. If congress continues to kick the can down the road or rely only on Band-Aids, the US health system will continue consolidating into a top-down market dominated by a handful of vertically and horizontally integrated monopolies, and the American patient will be the one paying the price. Thank you.
Speaker 7
Yeah. I think it's not turned on yet. Is it green? Can you hear me now? We can hear you fine.
Speaker 11
Thank you. Vice chair Harshbarger, ranking member DeGet, members of the committee, it's an honor to be here. Thank you. I'm Barbara Merrill, CEO of Anchor, a national association representing more than 2,500 private, mostly nonprofit organizations that deliver life-enhancing, cost-effective, home and community-based services to people with intellectual and developmental disabilities or IDD. I wanna spend my time today telling you about just one of those providers, DDRC.
Since 1964, DDRC has supported Coloradans with disabilities in the Denver Metro Area through services like early intervention, residential support, and employment training. The impact of HCBS is evident to people like Susan Hartley, whose son Cameron was diagnosed with a rare seizure disorder at just 6 months old. Susan was a 22-year-old single mother when she was told her son would probably only live to the age of three and that she should consider institutionalizing him. She refused, and years later, connected with her local community center board, which helped the family access therapy services and helped get a camera man on the waiting list for Medicaid funded HCBS. But the wait took years.
While I waited, life was so difficult, Susan told us. She pawned what she could, and she missed mortgage payments to cover Cameron's therapy and medical bills. Susan continued, but when we finally got off the waitlist and received Medicaid, our lives changed dramatically for the better. HCBS enabled Susan to keep on working despite Cameron's need for round-the-clock care. As she put it, I was actually able to focus on him and his therapy needs versus how I was gonna pay for it while keeping a roof over our heads.
Cameron passed away in 2017 from complications of his disability. But thanks to DDRC and HCBS, he lived to the age of 35, and he spent his entire life in a loving home. We hear stories like Susan's and Cameron's every week. That's because home and community based services make it possible for people with IDD to carry out daily activities of living, build skills, find and keep jobs. They also allow loved ones to remain in the workforce.
These IDD services, which can only be accessed through Medicaid, accomplish all of this at an average cost of $70,000 a year per person, a fraction of the cost of the alternative, which is to support people in large state-run institutions at an annual cost of $395,000 a year. Despite these services being the preferred and most cost effective option, numerous barriers threaten their sustainability. For starters, these services are not mandatory, meaning states decide whether to offer them and to whom. Chronically insufficient reimbursement rates have, for decades, made it extremely difficult for providers to recruit and retain direct support professionals, workers who can earn more working in fast food and retail jobs. Together, these factors explain why there were more than 550,000 Americans with IDD on state waiting lists in 2025.
Now new threats stand to make things worse. Last year, IDD service providers were told repeatedly that the Medicaid funding cuts included in HR 1 would preserve access for the most vulnerable and wouldn't impact disabled Americans. Yet when federal Medicaid dollars to states are limited through changes to provider taxes or state-directed payments, states often turn to cuts in optional services like HCBS. Numerous states this year are already proposing to cut directly from I/DD services to overcome budget shortfalls. One state, Idaho, has even proposed eliminating HCBS services altogether.
Given these barriers, we must ensure that every dollar we spend reaches people in need. That's why Anchor shares in the goal of ensuring that Medicaid is free from waste, fraud, and abuse. But such efforts must be precise and targeted. Cutting off funding from all providers of a given service serves to threaten the most vulnerable people and their families, and runs counter to the goal of saving taxpayer dollars. In conclusion, discussions about health care affordability must recognize the crucial role of HCBS, investments that prevent people from needing costlier, more intensive care.
Therefore, the best way to help lower health care costs and improve outcomes for people with disabilities is to strengthen home and community-based services so they can keep on supporting families like Susan and Karen's, building a stronger America for everyone. Thank you.
Speaker 7
Thank you, ma'am. We'll now begin questioning, and I'll ask members not to begin a new question to our witnesses as their five minutes expire, and would encourage members to submit written questions for the record. I now recognize myself for 5 minutes. And I wanna start with Doctor Azus. Right?
I wanna ask you about an issue that directly affects physician supply, patient access, and health care cost. And, you know, I'm a sponsor of the Fair Access and Residency Act in Congress, and I've been examining persistent discrimination against doctors of osteopathic medicine in federally funded residency programs. DOs and MDs hold equivalent licenses, yet nearly 75% of programs still require DO students to take the USMLE in addition to the COMLEX. And surveys show that DO students report bias in a residency match, while nearly 30% of programs seldom or never interview DOs. The AMA itself has acknowledged this discrimination as a real concern, but despite years of discussion within the House of Medicine, the problem remains.
Since Medicare spends over 20,000,000,000 a year and funds the majority of residency slots, barriers like this can restrict the physician workforce and ultimately affect patient access and affordability. So my question is, why hasn't the medical profession done more to solve the problem, with such little progress? And why shouldn't Congress act to increase transparency in Medicare-funded residency programs to ensure DOs are treated fairly and that patients benefit from the full physician workforce, sir?
Speaker 6
Thank you for the question. In the eyes of the American Medical Association, an MD and a DO are equivalent. Mhmm. There is no difference.
Speaker 6
So I can't speak to any kind of discrimination that's occurring in academic centers for residencies, but there is no organized effort to discriminate between allopathic and osteopathic physicians. As I said, in our minds, they're equivalent. We have a member of the MA board of trustees who is an osteopathic physician, and I would suggest that this is work that needs to be done in individual academic centers to ensure that they treat all applicants with equivalent credentials equally.
Speaker 7
Well, if nearly 75% of programs still require them to take the USMLE in addition, you know, to the complex. Look. And if you've got 30% of those programs seldom or never interviewing those DOs, if you've acknowledged the problem, then you need to fix it. So that's just my suggestion, sir. Miss Mitchell, there you are in the middle.
The $3.40 b drug discount program was intended to help vulnerable patients like the uninsured or the underinsured patients, but the nonpartisan congressional budget office found that hospitals can buy drugs at deep discounts while charging commercial insurers and patients much higher rates and keeping the spread. CBO also found that current 340b incentives are likely increasing federal spending, driving up costs through the use of higher cost drugs, reduced insurer rebates, and more vertical integration. From the perspective of employers who finance a large share of private coverage, are these incentives raising costs for purchasers? And should Congress consider stronger transparency in guardrails to ensure the 340b is benefiting patients rather than flooding costs in the commercial market? Because myself and my colleague, Buddy Carter, have legislation about 340 b.
Speaker 9
Thank you for the question. The 340b program, as you know, was intended to support safety net hospitals. But as you've also noted, it has expanded beyond its original intent, and we do believe it is driving up costs in the commercial market as well as for public payers. Yeah. We fully support more transparency to get a better handle on what's happening and why, and really identify strategies for savings.
Speaker 7
Yes. Thank you, ma'am. Mister Martin, from the perspective of family physicians, what are the steps Congress should consider to strengthen workforce capacity by better utilizing the providers already in the system?
Speaker 8
Yeah. I think thank you for the question. One, we think there needs to continue to be decentralization of training opportunities, not that physicians should be trained in hospitals. That is the most appropriate place for some physician specialties. For primary care and for other specialties, programs such as the teaching health centers, supporting programs that allow for scholarship and loan repayment based on rural training tracks and other opportunities, have the potential, and they have been successful in many parts of the country.
I may, if I could, answer your do question. We have almost 20,000 osteopathic physicians in our membership. We're one of the largest osteopathic organizations in the country, and I think that issue is largely specialty by specialty. As a residency review committee set up their criteria for applications, I think there is wide variation. I don't think that discrimination has taken place across the GME platform.
Speaker 7
Well, you need to talk to the good doctor beside you. Y'all get that picture.
Speaker 7
Okay. I think my time is up, so I will recognize the ranking member, Miss Diguet, for her five minutes.
Speaker 2
Thank you so much. I want to welcome you, Doctor. DeGiorgio, and tell you my daughter, Rafaela, is on the faculty at UCSF in internal medicine. So maybe you can get to know her. Thanks to the HR1, which is the big bad bill, all of our states are being. I call it big bad bill because it alliterates, Frank.
In Colorado, what that means is a 14% reduction in federal Medicaid funds, and that's money, as you heard in the testimony, that goes for sick kids, keeping people with disabilities in their communities, and providing coverage for folks. And now they're trying to scramble to how they can fund these already lean programs. So, Miss Merrill, I really wanna thank you for sharing Susan and Cameron's story to Coloradoans that are really being impacted by this. And I'm sure you know, and the rest of you know, lawmakers are really looking at cuts to caregiver services and programs to keep people in their homes and communities. Can you, Miss Merrill, delineate some specific types of services that are getting cut in Colorado and elsewhere?
There we go. She's helping her.
Speaker 11
Absolutely. Thank you. We're really worried about what's happening in Colorado. We're worried about what's happening.
Speaker 11
Let me share. Cuts that are already on the table are provider rate cuts to certain services, soft caps on services, reducing enrollment on the developmental disabilities waiver. But the legislature, we understand, and this is the information we got as recently as last night, The legislature is also considering deep across the board cuts to provider rates.
Speaker 2
Yeah. Okay. Thank you. Madam chair, I ask unanimous consent to put this 04/16/2025 study in health affairs about what sorts of services are first to go when budgets are cut in the record.
Speaker 2
Thank you. Now, I wanna say that in my district, which is Denver, Colorado, nearly half of the patients at Denver Health are on Medicaid. According to a conservative estimate, 20,000 Denver Health patients will lose Medicaid as a result of HR 1, the big bad bill. So I want to ask you, Pollock, people without insurance often go to the emergency room rather than getting care earlier and in cheaper settings. Is that correct?
Speaker 2
And it's not like those people suddenly don't need health care. It's like they can't afford to go, so they just don't go. Is that right?
Speaker 5
Yes. As I said earlier, we've become the family doctor to the uninsured.
Speaker 2
And but the, but in fact, they're not coming for preventative services. So, in fact, they're sicker, and that's more expensive. Is that correct?
Speaker 2
Now, in Colorado, the Colorado Hospital Association estimates that HR one might cause Colorado hospitals to close. And, their spokesperson said it's existential for some. In this recent Senate report, they say six Colorado hospitals, mostly rural, are gonna be threatened with closure. Would that surprise you that hospitals like this are feeling the threat of being closed because of this bill?
Speaker 5
No. And we've been very vocal in expressing our concerns relative to the impact of the significant Medicaid cuts that are now coming down the pike. And, so it's enormous concerns. And CBO suggests 7.5 million people will lose coverage as a result of that, and they all end up in the ED. We wanna work to prevent people from getting there, so they can get preventative.
Speaker 2
And when the hospitals close, that has a repercussion throughout the community, especially when it's a rural and underserved community. Isn't that right?
Speaker 2
Now, I'm also concerned, and you alluded to this, that when people go into these emergency rooms in these hospitals, that actually all the costs for insurance go up for everybody. Is that correct?
Speaker 5
Yeah. There is cost shifting as a result of government underpayment, not only in Medicaid, but in Medicare as well. But the real concern that we also have is that it will just clog already overburdened EDs, and there'll be longer wait times, and that affects everyone.
Speaker 5
Certainly, if people don't get the care on the front end that you could have prevented, and then they end up with the ED. That's not good for the patient.
Speaker 7
Gentlemen, I yield back, and I will recognize the chairman of the full committee, my friend, Mister Guthrie from.
Speaker 3
Thank you very much. And I kinda got started in my opening statement on some things I want to talk about. But first, I know Miss Merrill recognizing the one big beautiful bill we have, the largest investment community-based services at $8,000,000,000 over $8,000,000,000. I know states have the choice to do what they want to do. We wanna put federal incentives.
The other thing that people are talking about was the way that states fund their sort of portion of Medicaid, and they do it in a way that puts most of the burden back on the federal taxpayer. And we want states to take responsibility like they committed to when they first went forward. And so we'll see what state's priorities are as we move forward in this. So, mister Pali, I talked about my wife's six hours staying in the hospital being $28,000. I'm not sure the hospital received $28,000, nor do I think the insurance company probably paid $28,000. We're seeing.
And it just seems pervasive in the health care system. We just looked at a rebate model on pharmaceuticals where there's a high list price, but that's not what's actually paid. And it just distorts the whole market. And are we not seeing similar effects where plans and providers have been centered to increase price regardless of what the service may actually cost?
Speaker 5
Well, you know, when we talk about price and we talk about the bill that you referred to, that was 27,000 or something.
Speaker 5
Yeah. That's the list price. We are price takers. We don't have the, we're not getting that. It's a negotiated rate that we get with the insurance companies.
And for government payers, we get a rate. So none of that is the reality. And as you suggest, it was $500 at the end of the day. Mhmm. So that's the way the system is.
Speaker 3
That's the problem. It's the problem of the system. When we're trying to get price transparency, you can't figure out what anything costs. And so I'll go to miss Mitchell on it. Is it that I always thought that the way you're gonna deal with this is, because, you know, there's a choice.
I mean, they had great care. They were great facilities. Both of the instances I talked about, great facilities. We want that. So if employers finally throw their hands up and say, this is just beyond, this is just crazy.
So let and they surrender, then we end up with a different system that one of my colleagues talked about this morning. I don't think we'll have the same great hospitals that we have. So I'm bragging on the care that she got. It's just the way that this system works. And so to get, you know, an individual calling around and saying, how much does this cost?
It has an impact, but not like if a big employer with a lot of covered lives do it. So I when I first got this position, I started, oh, we really wanna focus on this, and you start talking to big employers. There was one instance I know there was a 700% markup on a pharmaceutical, and it was an auto supplier. And my I know the automotive business has said if an automotive supplier produced a product with a 700% markup that went into an assembly plant, they'd fire their buyer. But yet the human resources department, it turns out nobody knows what anything costs.
And so you put together an organization. So I just wanna you to kinda talk about, just how data's there, how trans how do can employers even figure out what things cost, what's out of pocket if they're just sending checks when they have no idea if it's really covering what they wanna cover or not, and seem to be covering a lot of other people's costs as well when they do this. We just kinda explain what's going on in the employment market. And Jamie Dimon said he wanted to fix it for his bank and couldn't, a very sophisticated financial organization couldn't get to what everything costs.
Speaker 9
Well, thank you for the question, and it is a critical challenge right now in US health care. Pricing is utterly irrational, and it is not related to quality. It is not related to safety. It's basically whatever a hospital can charge and get away with. That is one of the reasons Congress passed health care price transparency about five years ago.
Unfortunately, we do not have adequate compliance from the hospitals to share their prices. So a basic step forward would be to require them to fully comply with the existing rules, and make the price information totally available. Because, to your point, you can't make an informed decision without information. So self-insured employers who bear 100% of the risk want to pay a fair price for high-quality care, as is their fiduciary responsibility. Without that information, though, they can't do it.
It is still far too challenging to get past that.
Speaker 3
And we worked on this bipartisan, actually. We had it in the end of the bill last year. It ended up being just for pharmaceuticals. It didn't really get into the or PBM didn't really get into the hospitals after getting out of the senate. But how do you keep from having, well, you're, if I'm an employer and somebody says you just paid, say you paid half.
You paid $14,000 for a 28,000 service, and it wasn't really $28,000. Did them, how did employers know what that is? I know I got 10 seconds. I'm sorry.
Speaker 9
I will say we are now making that information, those prices, available to our members. They are using it in design.
Speaker 9
Well, that is a challenge, and they have to have full transparency into what goes into those prices, and how it relates to quality and outcomes. It is much more difficult than it should be, but employers are and will continue to use that information as it's available.
Speaker 3
Well, thank you. I appreciate it. I hope we can work together on this, and I'll plan to. I'll yield back.
Speaker 7
Gentlemen, yields back, and I now recognize the ranking member of the full committee, Mr. Pologne.
Speaker 4
Thank you, madam chair. Again and again, we've heard what I consider false claims from the Republicans that their Medicaid cuts would not harm people with disabilities, and they argue they can cut nearly a trillion dollars from Medicaid in their big bad bill. But people with disabilities who rely on Medicaid for their health care, nevertheless, wouldn't get hurt. And it's not true. The reality is simple.
You can't cut as much as 20% of federal Medicaid funding from the state's budget, and expect that people's care won't be impacted. It's just not possible. I was at my governor's state of the budget address last week in Trenton, and she was talking about a $2,000,000,000 structural deficit, much of which is from the Medicaid cuts. So the reality is this is gonna hurt people with disabilities. Now, Miss Merrill, I wanna hear from you and the providers you represent.
You know, what is being played out for people with intellectual and developmental disabilities as these cuts begin to take hold, if you
Speaker 11
Thank you for the question. I'd like to start by painting the picture of how incredibly fragile our community delivery system is to begin with.
Speaker 4
I wanted to particularly focus, though, on the kinds of cuts that are hitting home and community-based care because, you know, we worked hard over the years to prevent people with disabilities from being institutionalized, and I'm afraid that that's gonna be reversed now, if
Speaker 11
That's exactly what we're concerned about. And we saw that during the great recession when state budgets were under extreme constraints. During that time period, you know, in every single state in the country and the territories, we saw really pretty deep cuts to home and community-based services because they're mandated.
Speaker 11
mandatory, because they're optional. You know, we start out in a very fragile position because of stagnant, really insufficient reimbursement rates for decades. You know, our members, providers of services for people with disabilities, who are also price takers. We do not set the prices. Our members, providers of services for people with intellectual and developmental disabilities, rely almost 100% on Medicaid.
There's no opportunity to cost shift to commercial insurance, to Medicare. It is all 100% Medicaid.
Speaker 4
Don't wanna cut you off, but I wanted to ask another question, too. Does this mean that people are gonna end up, you know, not being able to stay home and are gonna have to be, we're gonna see the reverse?
Speaker 11
Absolutely. Absolutely. And that was the point of the story of Susan and Cameron. Already, we have 552,000 people on waiting lists across the country. And that's before states have to start making really difficult decisions when they're gonna have a whole lot less federal funding coming.
Speaker 11
See waitlist get a lot bigger. We're gonna see a whole lot more people winding up in emergency rooms at a cost of 3,200 a day. We're gonna see what we are already seeing. I mean, that's really the point. You know, the system is already super strained.
Speaker 4
Now the other thing we're talking about is the Medicaid cuts, but the other thing we're seeing from this administration is direct attacks and cutting funding for services themselves, not just the Medicaid cuts, but just cutting funding for the services. So in Minnesota, for example, the Trump administration took action to cut off all federal funding for services, including some of the disability services your members provide. So just tell me a bit about the services that anchor providers deliver in Minnesota that the Trump administration has acted to withhold all funding for, and what that means to cut off federal funding for this care. And there's only a minute left, but whatever.
Speaker 11
Well, let me just start by saying that fraudsters, there isn't an encore member that isn't as horrified as every member of this committee is by fraudsters, by criminals, you know, who divert money away from a system that really badly needs it. In Minnesota, as a result of actions that have not been targeted, they haven't been precise, providers of services for individualized home supports, you know, the types of services that allow people to stay at home, the cost effective, you know, cost saving services. You know, those services were put on payment hold. And we're talking about a whole lot of small providers who don't have the wherewithal, don't have that financial capability to go for very long without being paid. And that's exactly the type of risk that is, the type of service that is at risk.
And that's why it's just really crucial that, you know, as we address fraud, those efforts be super targeted. They'd be super precise.
Speaker 4
Thank you. Thank you, madam chair. Oh, thank you. Mister Chairman is back.
Speaker 1
Thank you very much. Gentleman yields back. Now recognized, gentleman from Florida, mister Bilaraucas.
Speaker 14
Holding this third hearing on affordability with regard to health care. While we focus on the topic of our providers today, I'd first like to take the opportunity to recognize the important work of many providers in my great state of Florida. My district, like many of my colleagues here, has a blend of larger hospital systems, safety net providers like community health centers, and independent physicians. And each of these plays a critical role in health care delivery. For example, BayCare opened the first and only behavioral health urgent care in Florida, in Newport Richey, Florida, in early 2025.
Just like a traditional urgent care, they are a no important appointment-needed resource for anyone in the community, whether they have insurance or not. Really incredible stuff. The success of this program has been remarkable, and yet many of the services are not reimbursed by the federal government. I also represent several independent medical practices and physicians who serve as the first line of defense for many patients in the office-based setting. Yet, due to a misaligned reimbursement in the physician fee schedule, independent practices are closing and consolidating, unfortunately.
We must pursue balanced reimbursement policies to meet patients earlier in the health care system. I'm proud to lead efforts to reassign, again, realign reimbursement for office-based services. So my first question is for doctor DG or DG ore, I'm sorry. It's okay. The Giorgio.
I know better. Something's ringing in my ear. I apologize, somebody's calling me. So your testimony discusses the loss of independent practices. In addition to reimbursement policies, can you elaborate further on the major factors driving this loss?
Speaker 10
So I think the loss of independent practices have largely been due to multiple factors, such as the site of service differential and the 340b program as being two major ones. The ban on physician owned hospital, obviously, is a barrier to entry in the hospital space for physicians, then as well as stark law creating undue, compliance burden for independent practices as well. So they're all contributing, and I think all need to be tackled equally.
Speaker 14
Thank you. Appreciate that. Question to mister Martin. Your testimony highlights the importance of community health centers. Can you share more on the role of family physicians at CHCs?
How do differing facility reimbursement rates impact provider participation and vertical integration in the physician marketplace?
Speaker 8
Yeah. Thank you for that question. So we're proud to partner with our community health center colleagues. About somewhere between 60-18% of family physicians work in a community health center. They are the prominent physician workforce along with their clinician colleagues in the community health centers.
And, we view the role of community health centers as becoming more important in particularly rural communities, other underserved communities as the marketplace becomes, as the loss of independent practices, we see community health centers filling a lot of that primary care need. So similar to what's already been said, we see a number of factors driving consolidation in primary care. I think the side differential payment certainly was an accelerant in many communities around the country, but the unpredictable nature of Medicare and Medicaid reimbursement certainly has also played an important role. And I do feel we saw the largest consolidation of family medicine around the high-tech act, which is really more of an administrative complexity, criteria where practices just simply couldn't afford the compliance associated with those regulatory requirements at that time. So it's a combination of things.
But we do see physicians moving around, leaving rural communities, and leaving other communities as consolidation happens. They go to seek employment opportunities in other places.
Speaker 14
Yeah. Unfortunately, we'd have to do something about that and get the word out on how these centers or the quality of care is outstanding, and they're accessible as well. So, big fan of community health centers. Alright, Mr. Chairman. I yield back.
Thank you.
Speaker 1
Gentleman yields back. Now recognize the gentleman from California, doctor Ruiz, for his five minutes of questioning.
Speaker 15
Thank you, Mr. Chairman. Look. This is very rich. You know, the majority has called a hearing on the high cost of health care, while flat out denying the elephant in the room. You know, this is a problem exacerbated by their making.
I'm an emergency medicine physician, and what we do really well is treat the acute crisis in the emergency department. And what we're doing right now is ignoring the gunshot wound and talking about the liver problems. We have to treat the patient. Our health care system is in a crisis right now. It's in a crisis because of the tariffs.
It's in a crisis because of the one big beautiful bill, also known as the big ugly law. It's in a crisis because they adamantly refused to extend the Affordable Care Act tax credits. All of these things raise costs for the patient. A lot of us here discussed how to lower overall cost for programs, for institutions, but our focus always has to be how do we lower the out-of-pocket cost for patients? That's who you all work for.
That's who I work for in the emergency department, is our patients. And so how are we gonna do that when we have a pay the health care system has just sustained gunshot wounds to the chest and the abdomen with the one big beautiful bill that cut nearly $1,000,000,000,000 out of Medicaid when these guys voted against and intentionally did not extend the Affordable Care Act tax credit. That's gonna raise premiums by 18,000 a year for many of my constituents. What happens when you with those actions, you're gonna have 15,000,000 more people uninsured. That's gonna be uncompensated care.
Sicker patients not able to go to primary care, not able to look at the price transparency. They don't give a shit about consolidation right now, when they're sick. They need health care now. And when they don't get it because they can't afford their health insurance or they just took it away because of the Medicaid cuts, they're gonna go where, Mr. Pollock? The emergency department.
That's gonna be uncompensated care for you. Now which departments do hospitals have to cut in order to manage their care?
Speaker 5
Generally, the low margin ones would be in behavioral health. One. Obstetrics.
Speaker 15
Labor and delivery. Yep. An infectious disease. Infectious disease. What else?
Speaker 15
You should have mentioned that. Absolutely. Because those are the departments that get cut from a hospital. So it doesn't give a nobody gives a rat's ass whether they're on Medicaid or not. If you have Medicare, Medicaid, or private health insurance, if the hospitals don't provide those services, you're shit out of luck.
You're out of luck. Okay? Because you're not getting the care. They cut health care. In addition to that, when those hospitals cannot get, cannot make the bills. After you've eliminated those programs, what's next for a hospital, mister Pollock?
Speaker 15
Closure. So when there's closure, is there an emergency department? Mister Pallak? No. No.
There's no emergency department. Right? So when somebody has a stroke or somebody has a heart attack and there's no emergency department, what does that do to the risk of permanent injury or death, doctor Azas?
Speaker 15
So now suddenly people in our community, whether you have Medicaid, Medicare, private insurance, are gonna be at risk for dying or permanent injury if they have a stroke or a heart attack. That's the crisis in the room because of the unaffordability caused by the one big beautiful bill known as the big ugly law. Now, how are you gonna pay for this uncompensated care? You're gonna renegotiate drug prices with the insurance companies, aren't you, Mr. Paulet? The hospitals will.
Speaker 15
We have to make a lot of changes and renegotiate the reimbursements with insurance companies. Right?
Speaker 15
Among those things. I asked 7 CEOs in this room. They said yes. That's how they're gonna cover the uncompensated care. So guess what they're gonna do?
They're gonna raise premiums. They're gonna raise premiums across the board for employers, for small businesses, for people with private health insurance. So suddenly, everybody is paying more. That's the gunshot wounds to the body coming into our emergency department that we have to take care of. Let's stabilize this patient by reversing these damages, and then let's talk about consolidation, workforce problems, and full parity with MEI, with other providers tying physician reimbursements to MEI fully.
Thank you.
Speaker 1
Gentleman yields back. Now I recognize the other gentleman from Florida, my good friend, Dr. Dunn.
Speaker 16
Thank you very much, chairman, and thank you to our witnesses today for being here. I wanna raise a bill I coauthored, if I may. HR 4299, the Protecting Patient Access to Cancer and Complex Therapies Act. This bill addresses the negotiation provisions in the IRA, the Inflation Reduction Act, that relate to drugs often administered or infused in independent community settings. This setting of care is one that we have to work to protect as it provides critical points of access for patients across the country, delivering high quality of care in a cost effective manner.
Under the IRA provisions, the negotiation is synonymous with a direct reimbursement cut to providers who are already facing significant financial pressures. Recent analysis by Avalara projects shows that on average, independent providers are gonna face a 47% cut in their reimbursements. And this is, you know, specifically a lot of part B medicines. That makes stocking and administering these lifesaving therapies a net loss and, you know, forcing difficult financial decisions on physicians in that situation. This bill provides a very simple technical fix, replacing a direct provider reimbursement cut with a back end rebate by the manufacturers to CMS.
And this will allow the system and the patients to still see the benefit of price reductions, while removing the physician from the equation. Without that fix, though, the lack of reimbursement is sure to become another critical factor forcing consolidation again of care and more expensive and less patient-centric care. Doctor Azus, can you provide some perspective on what additional reimbursement cuts might mean for the patients?
Speaker 6
Well, the physicians in America are in a crisis in terms of reimbursement and payment. As you've heard, costs are rising dramatically, whether it's the cost of insurance, the cost of rent, the cost of employees, the cost of everything we do to maintain our practices as a business and keep them open. And that crisis is what's accelerating further consolidation and independent practices to go out of business. So anything that will help prevent that from occurring is beneficial to the survival of independent That.
Speaker 16
That was my experience in practice as well. Mister Pollock, hospitals play a central role in providing care for complex emergency cases. How are hospitals responding to this growing number of physician practices that are being acquired and consolidated for financial purposes?
Speaker 5
Yes. You know, one of the things that's important to look at when you see this issue is that hospitals really are not their major drivers in acquiring physician practices. Over the last four years, the increase in hospital in physician practices has been acquisitions by private equity.
Speaker 5
Second to that has been the medical groups. Third to that is insurers, and we're the last 6% increase. Now what's important to remember is that we recognize that physician employment is not the only model, and there are a lot of different ways to affiliate with our physician partners. But sometimes we are approached by physicians who want to be part of a hospital system.
Speaker 16
I get that. You know, it's obviously, they're just having trouble keeping their doors open. And so they're.
Speaker 5
And the overhead costs associated with maintaining electronic medical records, cybersecurity, dealing with the insurers, and they want to be associated with us.
Speaker 16
The compliance costs alone are staggering. Let me be in our my limited time, wanna turn back to doctor Azos and say we were let's see. Oh, physicians are frequently they cite administrative burdens, prior authorization, increase, you know, as drivers of burnout and increased cost. From the AMA's perspective, how much time and money are physicians spending on administrative tasks instead of patient care?
Speaker 6
So physicians are spending a huge amount of time dealing with administrative tasks. In my own practice, I have two people full time just dealing with prior authorization. So I always tell my patients now that when I write a prescription, I consider it a recommendation because I don't know what's going to be filled, because we have to go through a prior authorization process frequently to get basic long-standing generic drugs approved so that I can treat my patient's glaucoma or whatever the problem may be.
Speaker 16
It's absolutely frustrating. And, you know, I wanna close with saying, I think that, requiring prior authorization, whether on the part of an insurance company or whatever, is the practice of medicine. And I would invite them into the medical liability arena. You and I have to pay med mal insurance, so should they. With that, Mr. Chairman, I yield back.
Speaker 1
Gentleman yields back. I now recognize the gentle lady from Michigan, Miss Dingle, for her five minutes of questioning.
Speaker 13
Thank you, mister chair, and thank you ranking member DeGet for holding this important hearing. I know you keep hearing all of us say this, but on our side, here it is a fact that the big, I will not call it beautiful, I can use a lot of other words but I'll behave and call it ugly bill that was passed and signed into law last year enacted drastic Medicaid cuts, jeopardizing access to essential care for millions, worsening health outcomes, increasing financial strain on providers, increasing the rates of disease, death, and uncompensated care. And then when we didn't extend the Affordable Care Tax Credits, more people got added to that. The providers in front of us all know that. These cuts are impacting care for our most vulnerable communities.
Disabled people and older adults who rely on home and community-based services, which are Medicaid-funded essential support for those groups. They help older adults and people with disabilities with day-to-day activities such as bathing, dressing, managing medication, and participating in employment. And what's more important is it's cheaper, a lot cheaper than institutionally. It roughly saves $44,000 per patient. Medicaid also sustains the care workforce and supports family caregivers.
HBS programs provide the majority of funding for direct care workers, 37% of whom also rely on Medicaid for their own health coverage. Three in ten childcare workers rely on Medicaid for health coverage, and at least 13% of family caregivers whose unpaid care contributed more than a trillion dollars to the economy depend on Medicaid for coverage. Robust investment is essential to support those who rely on HCBS, their caregivers, and their families. And cuts to this funding will put care even farther out of reach than those that need it the most. So without this federal investment, states are trying to fill the gap left by federal cuts, and they're cutting their budgets to make up for the decrease in federal support.
They just can't do it. It's one of the first services that is being cut. So I'm going to ask Ms. Merrill, some questions here. Can you tell us about why we see positive economic outputs from communities that invest in HCBS, and what it means to communities when we have robust provider networks for community-based services?
Speaker 11
I appreciate that question, because the investment in HCBS is a major boost for state economies. A study that was done just last year in Missouri found that an investment of 1.6 billion dollars from 2022 to 2024 contributed almost 6,000,000,000. Your question was, how does that happen? And it happens because when people, when you invest in HCBS and people have jobs and they are supporting people with disabilities and their families, they're buying groceries. They're buying cars.
They're saving to hopefully buy a house someday. You know, it's just a crucial part of the economy. Providers are businesses. Providers are spending money. Providers are buying groceries.
Providers are, you know, contributing to the economy in just a completely wholesale way. The combined federal state spend for Medicaid is $67,000,000,000, and that supports almost $170,000,000,000 in total. It's a significant impact.
Speaker 13
Okay. I have two questions, you're gonna have to go fast. Why is it problematic that community-based services are considered optional under Medicaid, which I don't think they should be, because they save money? And what happens to people on the waiting list for HCBS benefits when states also make the decision to restrict access or not to pay for?
Speaker 11
Well, let me just start by thanking you for your leadership, your championship in sponsoring.
Speaker 11
Well, yes. But your bill, the HCBS Access Act, would make HCBS mandatory. That would make an enormous difference. Thank you for that. Because we wouldn't have 552,000 people on waiting lists across this country.
Speaker 11
We save money because people aren't going into large expensive institutions. People aren't winding up in emergency rooms where the emergency rooms can't discharge them because they can't find placement.
Speaker 1
Yes, ma'am. I appreciate that. And the gentleman yields back. Now I recognize the gentleman from Georgia, Mister Carter, for his five minutes of questioning.
Speaker 19
Thank you, mister chairman, and thank you all for being here. I wanna preface my remarks by saying I'm gonna talk about the 340B program because I've got legislation that addresses what I think is a big, big problem and is gonna evolve into an even bigger problem. But I do wanna preface it by saying I support the 340b program, and I get very irritated when I hear some of these companies say, oh, he wants to do away with the 340b program. That nothing could be further from the truth. What I want is for simply the 340b program to be what it was intended to be for.
That's exactly what we're working for. You know, we've made a lot of progress in Congress on curbing waste, fraud, and abuse. And but we've got other problems, and one of them is the 340b program. That's why I've introduced the 340B access act. And the intent of this legislation is to improve the program's long-term sustainability so that it can benefit those that was intended to benefit.
The FQHCs, the rural hospitals, that's who it was intended for, and ensuring the patient benefits from that. But today, that's far from the case. The 340 b group program grows more than 20% every year. More than 20% every year. Three 40b as hospitals claim, 40b discounts on any patient they have contact with as long as they pick up their prescription from a pharmacy that has a contract with the hospital.
You know how many 340B contract pharmacies we have in the Orlando, Florida area? 5,000. 5,000 in Orlando alone. The 340 b hospitals are looking to capitalize on the nation's top tourist hub. That's what's worse is that the program's increasing cost for the group is it was meant to help.
That and that's what I'm trying to get at. The increasing cost to the group that it was intended to help. Patients on average pay more for drugs at 340b hospitals, while those same hospitals have failed to reinvest in staffing or charity care. Mister Pollock, I want to start with you. What can we why can we not come together and align on at least a clear patient definition to reduce the cost of the program and ensure that the patients benefit?
Speaker 5
Well, you know, the patients benefit in so many different ways from the 340b program. A lot of those funds are used not only to provide discounts to patients, but also for home health, behavioral health where it doesn't exist in those communities, substance and addiction programs.
Speaker 19
Can you tell me why you're opposed to this reform that I'm offering here?
Speaker 19
You know what the problem, what I struggle with is I get it. I know that the hospital and I use hospitals in a general sense. Okay? I know that the hospitals have become dependent on this. If we were to yank the rug out from underneath, it would be catastrophic.
I get it. But the problem I have with this is that this is masking the cost of other things that I cannot see. And if I can't see them, I can't help you with them. If you're masking the cost because of the profits that you're making on the $3.40b of other areas, then I can't help you. I wanna help you.
I know you're losing in other areas. So stop masking the cost of those areas with the 340 b, and let me see if I can help you. Perhaps there are rules and regulations that we can alter that would help you in those other areas.
Speaker 5
We would be very willing to talk about how we can increase the transparency of how the program is used and how the funds are distributed. Because you make a very important point, and we appreciate your recognition of the importance of the program. But this program does serve as a cross subsidy for the fact that we are grossly underpaid for a lot of other government programs.
Speaker 19
Okay. I'm not questioning that. And I believe you. But if I can't see it, I can't help you. And this is the problem that I'm trying to explain to you, that's what we're trying to do.
The 340b program was intended for the federally qualified health care centers. It was intended for all hospitals. Yet the urban hospitals and the large corporations have become so dependent on it, and I get it, that we we're having trouble now. Okay? And it's increasing costs for everyone.
Speaker 5
Let all due respect, it also helps a lot of very inner-city urban hospitals. I
Speaker 19
I get it. I get it. But we've got to contain the cost. If it's growing at 20% every year, it's unsustainable. We all understand that.
If you wanna see time fly, try to get five minutes up here. You'll see time fly. Okay? I'm down to seventeen minutes. I'm sorry.
I'm gonna have to submit these questions for the record because I'm out of time. But, look, I'm very passionate about this. I hope that you'll look at the 340b access act, and, damn it, don't be telling people I'm opposed to it, I wanna end the 340b program. That's not true. I wanna make it better, better for those it was intended for.
Mister chairman, I yield back.
Speaker 1
Gentleman yields back. Now recognize the gentle lady from California, Miss Baragon.
Speaker 18
Thank you. Miss, miss Merrill, do you know how much money was cut in HR one? How much Medicaid cuts resulted from that? Is it like 900,000,000,000?
Speaker 11
My understanding is the total cut to provider taxes, state directed payments, etcetera, totaled up to $1,000,000,000,000.
Speaker 18
1,000,000,000,000. Yeah. The number I have is about 900000000000. So, rounding up, you know, the chairman of this committee earlier said, let's see what the state's priorities are, but we've seen what president Trump and republicans' priorities are. They've shown us that they're willing to cut almost a trillion dollars in Medicaid.
They couldn't find the money to keep that, yet they could find money to get involved in another forever war overseas, which is costing us an estimated $1,000,000,000 a day. And so it's a little rich to have this hearing, and have nobody mention the cost of war versus the cost of, also what it's costing the American people in health care and the Medicaid cuts. Now you brought up a number that I had not heard before, and I don't know if you could see this, but you said $70,000 to keep a person in home care versus $395,000. That's a huge difference. That's a pretty big savings.
And I don't understand why when we get data like this, we don't have Congress making sure we're investing in programs like this to save money. And so it's really, it's really frustrating to see that the Medicaid cuts are going to result in more people being on waitlist and fewer people getting access to care. My mother is in the program. She had to wait six months to get into it, and we've seen the big difference. Mister Pollock, I wanna ask you, in 2021, Sutter Health, the largest hospital system in Northern California, settled a lawsuit for $575,000,000 that alleged the hospital system used its market dominance to stifle competition and to drive up costs.
Just yesterday, Sutter announced an acquisition that will create a 39 hospital system including across California, Minnesota, and Wisconsin. Should there be concerns that this California health nonprofit that was already large is doing this massive acquisition just five years after they settled a lawsuit over anticompetition practices?
Speaker 5
Yeah. I don't know the details of the lawsuit that they settled, but this goes to the whole issue of systems and consolidation. And in this case, it's a consolidation that is in two different geographic areas of the country. And I would point out that when we come together as systems, we are often providing a lifeline to rural hospitals that are in great jeopardy.
Speaker 18
That's good. I just want I'm gonna need to make sure I go to other folks. Miss Mitchell, I wanna talk to you. In your testimony, you highlight yet another case against Sutter Health in which Sutter withheld access to maternity care unless employers contracted with the entire system. Sutter settled out of court but returned over 500,000,000 to employers and unions, which you say suggest significant overcharging by Sutter.
From the employer's perspective, how can hospital consolidation allow this type of overcharging?
Speaker 9
Thank you. And we were actually catalysts in bringing the suit that you referred to, where anticompetitive practices like anti-tiering, anti-steering actually drove up costs. The example that I cited was to access some of the maternity services, employers were required to buy the entire system even if they didn't have employees in those areas. So it is highly problematic for these hospital systems to, first of all, consolidate and then participate in these anticompetitive contracting approaches. We are very concerned about this latest expansion.
We believe that will likely contribute to additional cost increases. And all of the data, all of the evidence shows that consolidation drives up prices by between 360% with absolutely no benefit to quality or access. So I think it's very important to address consolidation as an affordability crisis.
Speaker 18
Great. Thank you. Doctor, Isis, if consolidation raises the price of care because it creates less competition, what steps should Congress take to prevent consolidation?
Speaker 6
Well, I think the most important thing Congress can do to prevent consolidations is sure that we have adequate Medicare reimbursement to independent physician practices that will allow them to stay open. As you know, the Medicare fee schedule impacts not only Medicaid, but also private insurance reimbursement. So in an era where physicians are struggling to keep their offices open because of financial pressures, updating the Medicare fee schedule consistent with an inflationary update on an annual basis, which all the other providers receive, would be of a tremendous benefit in ensuring less consolidation.
Speaker 1
General lady yields back. Now I recognize the gentleman from Pennsylvania, Doctor Joyce, for his five minutes of questions.
Speaker 20
Thank you for yielding, Mr. Chairman. According to CMS data from 2024 on total health care expenditures, spending has reached a new high of over $5,000,000,000,000. Notably in this report, hospital costs, which now make up 30% of that 5,000,000,000,000, are the steepest rising costs being paid for by the American patient today. There are several forces at work that drive these costs higher. One of the biggest is, as many of you have mentioned, hospital consolidation.
In response to the consolidation in health care medical markets, RFI HHS issued a report concluding that consolidation of health care providers has led to higher prices, reduced access, and lower quality of care. Because of the differences in Medicare fee schedules, hospital reimbursements have gone up, while the reimbursement for independent physicians and providers has gone down when adjusting for inflation by 33% since 2001, and patients continue to pay that price again each and every day. When a hospital acquires a physician practice, patients are exposed to higher co-pays. They're exposed to prices that are increased for the exact same services simply because the ownership and the name on the door have changed. But there are other hidden charges that will occur as well.
Mister Martin, do large hospital systems implement restrictions on their employees, physicians and their physicians regarding their referral patterns? Does that affect the bottom line?
Speaker 8
Thank you for that question. It is our understanding that, yes, many health systems will impose either direct or indirect requirements on their employed physician.
Speaker 20
Doctor DeGiorgio, have you seen instances where this occurs as well as when a doctor is reprimanded for a referral for an out-of-network referral, and even if it is in the best interest of patient care?
Speaker 10
I have plenty of colleagues who work for large health systems and have told me that they have faced this where it may be things like losing a parking space or not getting a bonus if they allow what is commonly referred to as leakage outside the system. There's even that that term is used for it if physicians in the system let referrals go outside of the health care system.
Speaker 20
As doctor to doctor, I don't like that term, leakage. I think that doctors have a responsibility to provide the best care for their patients, and I think that should be unencumbered by where the patient is referred. I agree. Doctor Aces and Mister Martin, this is a yes or no. Is increasing the Medicare physician fee schedule by tying it to the rate of medical inflation a necessary first step to stop consolidation?
Doctor Aces. Yes. Mr Martin. Yes. With my remaining time left, I'm gonna return to you, Doctor DiGiorgio.
Beyond an initial down payment for the Medicare physician fee schedule reforms, must we and Congress work to lower costs and increase competition? I have long advocated for the repeal of the ban of physician owned hospitals. But can you explain how that and other steps are necessary in a minute and a half?
Speaker 10
I can give it a shot. So, the physician-owned hospitals work because the same physician who sees the patient every day is also the one making operational decisions. So physician-owned hospitals have a tremendous record of providing high-quality care at lower costs than non-physician-owned hospitals. I have a colleague who owns a spine hospital that runs it with about one third of the amount of staff that a similarly sized non-physician owned hospital runs. Is the quality of care the same?
No. It's better. And his patients prefer that hospital. They have a Net Promoter Score of 93, or similar-sized hospitals have a Net Promoter Score in the mid teens. So the patients prefer these hospitals.
These hospitals provide wonderful care because, again, the physician who sees the patient is the one making the operational decisions. Personally, when I go in the middle of the night to do decompressive craniectomy, 2AM, there's no administrator that knows how to do that surgery. There's no administrator that knows what is needed to make that happen efficiently and put the patient first. Only the physicians have that knowledge. So physician-owned hospitals align the interests and the incentives in the patient's best interest.
Speaker 20
Are you aware of where and who owned the first physician-owned hospital in the United States?
Speaker 20
I wouldn't use that verb. Is anyone aware of that? Doctor Aces, do you know where the first physician-owned hospital was in the United States? I don't know. It was owned by Benjamin Rush, a physician who signed the declaration of independence.
It is owned and was owned by a physician in the city of Philadelphia, Pennsylvania. It is a precedent that should be maintained. With that, mister chairman, I yield the remainder of my time.
Speaker 1
Gentleman yields back. We could go into a long lecture on doctor Rush who was also big about being in person to cast his vote on the declaration of.
Speaker 1
Another time. I now recognize the gentleman from Texas. Mister Visi, first five minutes of the questioning.
Speaker 21
Mister chairman, thank you very much. As my colleagues have made clear, we will all feel the impacts of Republicans still in $1,000,000,000,000 out of the American health care system. But on the topic of provider landscape in this country, I want to be very clear about how these cuts are going to devastate the physician workforce, which is already in crisis. Doctor, Jesus, would you agree that the United States is currently facing a physician shortage? And what does that mean?
Speaker 6
So we definitely are facing a physician shortage. As I've mentioned in my opening comments, we're expecting a shortage of 86,000 within ten years, and we already are facing that shortage. And what it means right now is it makes it much more difficult for patients who need care to get appointments. Simple as that. When my spouse needed to be evaluated by neurologists, it was a six-month wait.
And that's being well connected in the community. So if that's happening to me, it's happening to my patients as well.
Speaker 21
Yeah. Yeah. Absolutely. Yeah. People already have to wait a lot longer, travel further, pay more for care if they can get it at all.
And instead of fixing the problem, last year's Biggugly Bill made it worse in two specific ways. First, it makes it harder to become a doctor. Today, the average cost of one year of medical school in the US is about $60,000. On the high end, it will cost you well over $100,000 per year. When all is said and done, going to medical school can set you back half a million dollars.
But the Big Ugly Bill capped the amount that a medical student can borrow from the federal government at about $50,000 a year. Does that math sound about right to you? And the reason why I'm asking is that we are asking kids across this country from low and middle-class backgrounds who dream of becoming a doctor one day. That's something that any school, public or private, becomes a doctor. It's like a big deal.
But we're telling kids who dream of becoming a doctor one day to come up with at least $40,000 or turn to predatory loans if they want to help their community. I think that's devastating. Doctor Asus, will a $50,000 annual cap on federal student loans severely limit who will be able to go to medical school or worsen the physician shortage?
Speaker 6
I think it's the belief of the American Medical Association that a cap like that will limit opportunities for individuals to attend medical school. It will impact the very variety of individuals who may choose to become physicians, which will impact the care that we render in our own communities.
Speaker 21
Yeah. Yeah. Absolutely. Thank you. Now the big ugly bill doesn't stop at making medical school more affordable.
It also makes it harder for physicians to stay and to practice. And as a reminder, my Republican colleagues ripped about $880,000,000 out of Medicaid, and states do not have a magic pot of money or rainy day funds to replace trillions of dollars. Instead, states are now being forced to make very hard decisions, and that will include reducing the amount they pay to providers. Mister Martin, on average, what does Medicaid pay physicians compared to Medicare or private insurance?
Speaker 8
Thank you for that question. In Medicaid, for primary care, it's about 60%, in Medicaid versus Medicare, and commercial rates are one and a half to two times that.
Speaker 21
Yeah. So it sounds like Medicaid pays about 20 to 30¢ per dollar that a private insurance pays physicians, and that's already a very huge disparity. Now states will have to pay physicians even less. So, mister Martin, how would you even lower Medicaid reimbursement rates? How would even lower Medicaid reimbursement rates worsen America's physician shortage?
Speaker 8
Well, in primary care, it's a great concern because primary care tends to have higher Medicaid panel than many other physician specialties in their community. So lower payment rates, lower coverage rates, separating people from coverage in the Medicaid program is going to create issues for family physicians in many communities. And, you know, quite honestly, it's going to result in less prevention care, less vaccination, less cancer screenings, and, ultimately, more upstream cost as patients have disease progression and go to higher cost care sites.
Speaker 21
Yeah. No. Thank you very much. And as you can see, this physician shortage crisis is only going to get worse under these Republican policies. It worries me.
You know, we think about tech workers and the shortage that we've had in that space. We think about ag workers. We may have to start looking for some way how we're going to do more visas to bring more doctors over because cap in rates and these Medicaid reimbursement rates, they're not going to help us recruit or maintain more doctors in our system. Thank you, Mr. Chairman.
Speaker 1
Gentleman yields back. Now I recognize the gentlelady from Iowa, Doctor Miller-Meeks.
Speaker 22
Thank you, mister chairman, and I want to thank our witnesses for testifying before the subcommittee today. Today's hearing is critically important because every policy discussion is real patients. Employers trying to provide health insurance, families trying to afford care, seniors managing chronic conditions, and providers working to keep their doors open in increasingly complex systems. Over the past decade or so, we've seen significant consolidation across the health care system, especially after the passage of the Affordable Care Act, and particularly among hospitals and large health systems. At the same time, Medicare physician reimbursement has declined by over 30% in inflation-adjusted dollars since 2001.
If we continue on the current path, we're not just cutting payments. We are cutting access. In rural Iowa, we don't have an excess of providers. When one closes, patients have to drive hours for the care. A two to 3% cut in Washington can mean the difference between staying open and shutting down in a small town.
Doctor. Azuz, as both board-certified ophthalmologists who practice outside of large health systems and in rural areas, we've experienced how many small, rural, and independent practices struggle to participate in value-based care models. Can you tell me, are there payment models that would be more accessible without disadvantaging independent providers who are often the ones in small towns?
Speaker 6
So as a fellow ophthalmologist, I can tell you that we don't really understand what value-based care models are for ophthalmology, unfortunately. There are not a lot of opportunities for ophthalmologists to participate in a value-based care model. In reality, as you know, ophthalmology, in particular, is episodic care. People come in annually for an examination. If they have a more significant disease such as glaucoma or diabetic eye disease, we may see them every three to six months.
Speaker 22
Let me ask, you mentioned episodic care. Are there procedures that could and once were done in a physician's office that would be less costly to the patient and to the health care system overall, that are now done in hospital outpatient departments?
Speaker 6
Well, absolutely. I mean, as we see consolidation taking place and physician practices being acquired or physicians working for the hospitals, if you go in for an eye examination at a large system in my area, the cost is double what it costs when you come into my own office.
Speaker 22
Missus Mitchell, can you speak to the impact of hospitals acquiring physician practices and entering into employment arrangements that may exceed fair market value or be commercially unreasonable, and how Congress should address these practices to protect affordability and competition.
Speaker 9
Yes. Our members want to pay more for independent physicians because we know that it leads to better referrals based on quality. It leads to lower costs. And the distortion of pricing in hospitals is highly problematic. When you look at site neutral payments, we could save billions of dollars by just charging the same price from a hospital-owned facility to a nonhospital facility.
I mean, a Band-Aid is a Band-Aid. A CT scan is a CT scan, and yet they are upcharging because they can. We would like to have those fair prices.
Speaker 22
Thank you. Doctor Deed Dejorio, my apologies. You and I both strongly agree that section 6001 of the unaffordable care act and stark law create an untenable double standard. As you say, why should independent doctors be subjected to prohibitions on self-referrals when corporations aren't? How have these policies changed provider behavior to incentivize vertical consolidation and higher costs?
Speaker 10
The compliance burden alone for Starclaw is immense. I have a colleague who's a spine surgeon. He just wanted to purchase his own MRI machine. He hired three lawyers and got five different opinions on whether or not he was violating the Stark law. So just the compliance costs on Stark are immense.
And then, of course, with the side of service differential, by banning physicians from owning hospitals, we cannot participate in those facility fees. We are shut off from the facility fees. Even ambulatory surgery centers, which are almost identical to hospitals, charge significantly less and do not get the hospital outpatient department facility fees. Many neurosurgical procedures can be done in ASCs much cheaper than in hospitals, but we are not allowed to participate in owning those ASCs.
Speaker 22
Thank you. And, mister Pollock, the declining fee schedule conversion factor, and rising hospital base rates are not an accident but a result of policy choices made by Congress in MACRA of 2015. For the record, I'm just gonna submit these questions for the record to have you answer them. The primary base hospital rate payment for inpatient services has increased by 30% since 2016. The outpatient service base rate has increased by 26% since 2016.
Meanwhile, the physician base payment rate has declined over the same time. Shouldn't we have Medicare economic index and inflation adjustment for physicians? It's high time that we do, to ensure we have access. With that, Mister Chair, I yield back.
Speaker 1
General Lady yields back, and I recognize the gentleman from Ohio, Mr. Lanzman, for his five minutes of questioning.
Speaker 23
Thank you, mister chair and the ranking member for the hearing, and for all of you for being here. We appreciate it. I wanna focus on the health care crisis and get the thoughts of a couple of you. Mister Pollock, you represent the hospitals. Mister Martin, family physician.
So I'm gonna ask both of you some questions to get at if you believe we're in the middle of a health-care crisis. And if so, what is at the heart of it? If you had to pick one or two things, this isn't a gotcha question. I'm legitimately curious as folks who are representing providers. How would you describe this as a health care crisis that we're in?
Yes or no? And then what is driving that? One or two things. Mister Pollott first. Sorry.
The mic.
Speaker 5
That's an easy question to say yes to on a yes or no question. Yeah. Between government underpayment, rising number of uninsured, access problems for behavioral health, workforce shortages, supply chains that are broken, and our investments that we need to do in cybersecurity. There are multiple dimensions to the issue. So your question is how do we get at some of this?
This hearing is about affordability, and we are supportive of looking at new arrangements to better coordinate care. Different versions of value-based payment is the right direction to go in. When you consider that, 1%.
Speaker 23
Of the Mister Pollack, hate to interrupt. That was super helpful. I just wanna get mister Martin, then I'll come.
Speaker 5
11% of the people concerned, 21% of the spend. Yeah. 5% over half. If we can focus on those people.
Speaker 8
I will be brief. Yes. We were in a health care crisis. It is first driven by the fact that we are becoming more unhealthy as a population. We have separated people from primary care, the opportunity to pursue health that results in higher cost care at higher cost settings.
Number two, we have layered payment policies on top of each other that have accelerated consolidation in ways that I think were unpredictable, but they are severely damaging.
Speaker 23
I agree. I appreciate the answers and agree based on my conversations with hospitals and physicians and folks close to the ground that it is a combination of several things. You mentioned mister Pollock a couple, and mister Martin, you, I think, reiterated some of those. One being there is the underpayment issues, which we could address. I mean, we could immediately, as the United States Congress, increase at least the Medicare, Medicaid reimbursement rates, the way in which we pay physicians.
We could do that immediately, and I would support that. I think that would make a huge difference. We also talk about the coverage issue, and that is part of the issue with more and more people being unhealthy. If they don't have coverage, they're likely, like, more likely to be unhealthy. The ACA subsidies, it did not help.
The fact that this congress did not extend the ACA subsidies made it harder for you all. Correct? Or maybe let me ask in a less leading way. Mister Martin, what is the impact you're seeing?
Speaker 8
Well, I would go back to my opening statement. Separating people either procedurally or financially from an opportunity to seek and receive health care, particularly primary care, will result in them being less healthy for a variety of reasons and will result in higher costs. So the credits or whether it be Medicaid eligibility, those procedural and financial barriers have health consequences.
Speaker 5
Well, according to CBO, 4.5 million, 4.2 million people will lose insurance as a result.
Speaker 23
It's a staggering number. Can I got a minute left on the Medicaid cuts because you take a trillion dollars out of the system, which is what we're seeing with the Medicaid cuts? A trillion dollars in Medicaid cuts. Mister Pollock, what are the hospitals, how are they reacting?
Speaker 5
Well, they're putting together scenarios to determine how best to adjust to that, with the hope that perhaps we can get some of that reconsidered.
Speaker 5
Adjust means, how do you maintain the highest quality service in the services you can provide.
Speaker 5
Do you simply have to not provide or rely on other parts of the system to do it? That's where systems come in, by the way.
Speaker 8
Labor and delivery units are going to close. Prenatal and postpartum care is going to decline. Vulnerable populations in vulnerable geographies are gonna have a harder time accessing care. Primary care is gonna become less available and less affordable for those individuals.
Speaker 23
By the way, it is a nightmare situation. I mean, what you just painted is like a nightmare scenario. Unfortunately, that's all my time. Thank you, and I yield back.
Speaker 1
Gentleman yields back now. Recognize the gentle lady from Florida, Miss Cammick, for her five minutes of questioning.
Speaker 1
The real purpose in her poster is to make sure you don't have to see the ugly face of the chairman. I'm just saying.
Speaker 25
Thank you for your graciousness, Mr. Chairman. And thank you to our witnesses for appearing before us today. You know, throughout this affordability series, we have examined the drivers of what patients ultimately pay. And today's focus on the provider landscape is really a cornerstone of the discussion, so I'm excited to be having it today. But as we all know, families across the country are paying more for health care, whether it is higher out-of-pocket costs, higher premiums.
And, ultimately, they're seeing fewer choices of where they can receive care and when they can receive care. Now a major trend that we're seeing is consolidation across hospitals and physician practices, and we're hearing that integration improves coordination and expands access. But for so many patients and so many of my constituents, they're seeing the opposite. It's not what that feels like. It feels like they are getting worse outcomes as consolidation increases.
In market after market, consolidation is followed by fewer independent providers, less competition, and fewer real options. And in some cases, patients are paying more for the exact same service simply because of where it is delivered. Now Congress has taken steps to improve transparency, but transparency alone does not create competition. In highly consolidated markets, it can just as easily become a tool to raise prices as to lower them. Now, at the end of the day, patients don't really care which part of the system is responsible.
They just know that they're paying more, getting fewer choices, and that the system continues to be broken. Now as we hear from witnesses, I think it's important that we separate theory from reality, and we focus on what patients are actually experiencing. So I'm gonna start with you, Mr. Pollock. In our last hearing, we heard that vertical and horizontal integration improves care coordination and expands access. But in market after market, as I just said, consolidation is immediately followed by higher pricing and fewer independent providers.
So I'm gonna ask you directly, how is consolidation supposed to lower prices for patients when the evidence consistently shows that prices go up after hospitals merge or acquire physician practices?
Speaker 5
You know, I know some people may say that, but for the research that we've done, we've actually seen operating costs reduced as a result of systems coming together by minus 3.3%, and we've actually seen revenue decrease per adjusted admission. Now, the issue, congresswoman, is that it doesn't always get passed on to the patient.
Speaker 5
Because there's an insurer in between that sets the rates. We've also seen, by the way, quality improve according to articles in the Journal of American Medicine, where we have seen a reduction in readmissions and a reduction in mortality measures as a result of systems coming together. And, again, as I said earlier, systems are a lifeline for hospitals that may not survive on their own, especially in rural areas.
Speaker 25
I think the data points to a completely opposite scenario than what you just painted, but I'm gonna direct to the doctor. Do I have to do it with the Italian hand gesture too?
Speaker 10
Yeah. There's some studies that show that the volume of services and the intensity of services do go up with acquisition of private physician practices. I believe the latest number I read was about a 14% increase in Medicare spending alone with acquisition of independent practices. And your chart there, it should be pointed out that while hospitals are 31% of that spending, about 75% of the physician and clinic spending is actually owned by the hospital, and a significant amount of the retail prescription drug spending is also going to the hospital largely through their 340B program. So hospitals actually take up a lot more of that chart than is led on.
Speaker 25
We were trying to be nice to the chart. Mhmm. But I think that is very important for folks back home watching what you just said to get clarity in this. Now I know my time is running out, so I'm gonna jump to you, Miss Mitchell. Employers supported price transparency so patients and purchasers could compare prices and make informed decisions.
But in highly consolidated markets where one or two systems dominate, have you seen cases where transparency simply allows dominant systems to see competitors' pricing and adjust their prices upward?
Speaker 9
We are concerned about that. We think transparency is absolutely necessary but insufficient. It takes the large purchasers to actually use that information to negotiate better rates. That is extremely challenging in the consolidated regions. I will also say all of the evidence we have shows that consolidation only drives up prices, without any corresponding improvement in care.
And it's interesting that, they say that operating costs go down because that just means that there may be more savings at the hospital, but that is certainly not being passed on to anyone paying a bill.
Speaker 25
Yeah. So just to put a button on it, with the last ten seconds that I have. As consolidation increases, access goes down, prices the consumer pays go up. And even though they say that they're saving money in their system, that's really going toward their profits. And so I think in the end, it's just a broken system that continues to perpetuate.
Speaker 9
Correct? I would agree. And if they are generating savings, they should come to the patients and purchasers. 100% agree with that. I yield back.
Speaker 1
Gentle lady yields back. And now recognize the gentleman of Louisiana, Mister Carter, for his five minutes of questioning.
Speaker 26
Thank you, mister chairman, ranking member, for holding this hearing, and thank you to all of our witnesses for joining us here today. Under the failed leadership of Secretary Kennedy and the Trump administration, we've seen some of the largest cuts to Medicaid in history. ACA premiums have skyrocketed for families and small businesses owners. The dangerous misinformation on vaccines has grown rapidly. As a father of two sons, I empathize with the health care providers navigating this difficult landscape of misinformation and the parents, especially first-time parents, looking for evidence-based guidelines and recommendations to protect their children from preventable diseases and to keep them safe and healthy.
Doctor Azuse, given Monday's court decision to halt secretary Kennedy's and the ACIP's damaging childhood vaccine schedule changes, parents and providers alike will be relying on trusted medical societies like the American Medical Association and the American Academy of Pediatrics to provide them with reliable information. How will the recently announced collaboration between AMA and vaccine integrity projects help prevent parents, rather help parents make informed evidence-based decisions, and how will it help clinicians communicate the safety and efficacy of vaccines?
Speaker 6
Thank you for that question. As you know, physicians need evidence-based vaccine guidelines that they can trust and that they can use to confidently advise our patients. And, that's why the AMA is working with the Vaccine Integrity Project. So we will be able to restore a transparent, evidence-based process for vaccine recommendations. In particular, we will be doing a review, a structured review to assess vaccine safety and effectiveness for the upcoming 2026 to 2027 respiratory virus flu season and others.
And, we'll be convening other medical organizations as well as public health and health care organizations to develop a comprehensive set of guidelines for vaccine use. You know, I recently encountered one of my own patients who has a newborn and was telling me that she was afraid to go to her mommy and me classes because she was uncertain whether the other children in the mommy and me class would be vaccinated.
Speaker 26
And along that line, I don't want to cut you off. I got a little bit of time. Is it safe to assume that the public has lost confidence in the CDC and HHS in these policies?
Speaker 6
I think it's clear that the public needs an independent organization like the AMA.
Speaker 26
Would you also agree that having the collaboration between the organizations that I've mentioned and you mentioned is critical to restore that confidence? Yes. I'd like to enter to the record, mister chair, three articles by unanimous consent that speak to these issues. The New York Times and talking points about vaccines. Pediatricians navigate the sea of misinformation.
CNN hospitals fighting measles confront a challenge. Few factors have seen it before. Few doctors have seen it before. And the Washington Post, judge Holt's RFK junior's vaccine overhaul citing a flawed process.
Speaker 1
What we'll do is we'll take a look at those real quick and then probably do it at the end, but I don't see any objection. I assume they're all timely. I always ask.
Speaker 1
I expect they will be, but we'll have our team take a look at them. If you can pass them to us.
Speaker 26
Doctor Seuss, can you share the challenges your members are facing with the current climate of vaccine misinformation and fear?
Speaker 6
Well, I think, as I indicated, patients are confused. So anything that will help allay that confusion is a benefit. So they need to trust their physicians, and they need to trust that physicians will be using science and appropriate measures to advise them and ensure that they understand what vaccines are needed and when.
Speaker 26
Is it not also true that we are still fighting new diseases, new needs for vaccines? We don't need to revisit those that we've conquered, like measles. Isn't that correct?
Speaker 26
How bad is the measles epidemic that we see in our country as a result of a removal or a stepping away from the efficacy of vaccinations?
Speaker 6
Well, as you know, we're having measles popping up all over the country. Most recently, we had nearly 1,000 cases in South Carolina. So that is that.
Speaker 26
Is that directly attributed to the fact that people are moving away from vaccines?
Speaker 6
Patients who don't get vaccinated are gonna get the measles if they are exposed to it. Yes.
Speaker 1
Gentleman yields back. Now recognize the gentleman from Oregon, Mister Bens, for his five minutes.
Speaker 24
Thank you, mister chair, and thank you, the panel, for being here. I'm from Oregon, and I've traveled around my district, which is large, 70,000 square miles. And I've gone to, along with my staff, about 31 different hospitals and health care facilities. I ask them when I get there, because they're all concerned. They're all having difficulty with the cost of everything.
What that we could do to help drive down costs. And so the prompt answer is always staffing. It's almost always nurses. And so I my staff found a study by McKinsey and Company 2023 where it says that we have a projected nursing shortage of between 200 and 450 nurses. So I'll just start.
I'm not sure who to start with. Mister Martin, does that sound right? Is this a surprise to you?
Speaker 8
It is not a surprise to me. There are health care shortages in physicians, nurses, med techs, and lab techs. It's well documented that there's a health care professional clinician shortage across the country.
Speaker 24
Because what do we do about it? What's the solution? Give me we need between 200 and 450 thousand nurses. What's the solution? By the way, members of my family are nurses.
The members of my family are going to nursing school. It's a long and necessary process. So are you talking about immigration, or what are we talking about to solve this problem in the near future?
Speaker 8
I will be humble here and tell you I'm not an expert on the nursing shortage. I obviously, the workplace environment, compensation rates, quality of work, the importance of the work they do, and, you know, drives professional satisfaction in all health care careers.
Speaker 24
Just let me mention that the going rate for a nurse in Oregon is 120,000. A traveling nurse, it's 220,000. So I'm not sure that what people are being paid is the problem. It appears that we don't have people that want to do it. Doctor.
DeGiorgio, what's your opinion?
Speaker 10
I think a lot of it comes from the consolidation. The same things that we see in the physician workforce are mirrored in our nursing colleagues. So number one issue is with consolidation and with a lot of the regulation is we see a deprofessionalization of the workforce, both on the physician and nurse side. If you've been in a hospital, the nurse is no longer predominantly at the bedside. She's stuck at the computer.
Right? And this is happening with our physicians as well, is that we are turning our professional workforce basically into data entry clerks because of the large amount of regulation. And then with consolidation, we see the same thing on the physician side, but there's a reduction in pay. There was one study that showed about a 7% reduction in nursing pay when large systems consolidate. So systems consolidate, they cut out the pay because there's no long now they're a monopoly buyer of nurse labor, then they deprofessionalize.
Speaker 24
Is artificial intelligence going to be the solution? We hear about it all the time, that, you know, it's all solved. All this paperwork's going to melt away because of AI. Is that correct?
Speaker 10
I'm very hopeful about artificial intelligence. I was also, I think, people were hopeful about computers. The problem is we overregulated the electronic health records. So instead of them becoming helpful, they became an impediment to care. I hope we don't make those same mistakes with AI.
Speaker 24
And so what's who's taking care of this? Who's making sure those mistakes don't happen? Because the truth of it is, it almost seems as though the shortage gives people an excuse to raise prices. Is that the truth?
Speaker 24
Agree. And we've heard that in other conversations with various groups. And by the way, the remarks about larger systems resulting in a higher quality care at less cost, I have to beg to differ. At least in previous conversations that appeared that there was a focus on those types of things while ignoring the amount of money being made on the float by delaying care. And so I asked that question of UnitedHealthcare when they were here.
It was discouraging to hear how many billions of dollars were being made on the float, if I must say. And that appears to be something we should be focusing on. As long as I'm with you, doctor Giorgio, in the minute I have left, you're a practicing neurosurgeon in a big health care system. You've done a lot of academic research in health care affordability. Where does the physician fit in this shortage space?
And we heard earlier a focus on residencies. What can we do here in Congress to spring loose this huge herd of doctors waiting behind the barrier of not having enough residency slots?
Speaker 10
Well, the training pipeline is one area, and I think we should certainly support more training. But on the back end as well, if we empower physician ownership and independent physicians, we'll keep more physicians practicing longer. Right now, too many physicians are looking for the first exit out of clinical practice because we have diminished the practice of medicine so much, and we've reduced independent physician autonomy.
Speaker 24
And you, your solution there, you think we should ban the consolidation? What's your solution to the problem you just asked?
Speaker 10
described? I think addressing a lot of the issues that are driving consolidation, such as the ban on physician-owned hospitals, Stark law, the site of service differential, 340b certificate of need laws. All of those could help empower physicians to open their own independent practices. And with that investment and buy-in into their communities, practice for longer and help alleviate the workforce shortages.
Speaker 1
Gentlemen, yield back. Now recognize the general lady of Texas, Miss Fletcher, for her five minutes of questioning.
Speaker 27
Thank you, Mister Chairman, and thank you to our witnesses. House Republicans have once again brought us here to discuss health care affordability, an important topic for people across the country, and certainly at home in my district. But this hearing is really looking to shift the blame from this Congress and this administration for the health care affordability crisis that we're experiencing. And, certainly, there are a lot of important drivers. But as many of my colleagues have already said today, we cannot have any discussion about health care affordability without acknowledging that over the last year, this Congress has voted time and again.
And it is Republicans in this congress who have cast vote after vote to increase health care costs in the so-called one big beautiful bill that cut Medicaid and, in turn, because the cuts were so big, cut Medicare too, and by failing to extend the Affordable Care Act's enhanced premium tax credits. For an administration that says it wants to make America healthy again, its actions demonstrate the opposite. And my home state of Texas already has the highest uninsured rate in the country. And because of this, Congress's actions over the last year at the urging of the Trump administration, that number's estimated to go up, not down. Now I have the privilege of representing so many people who work at the Texas Medical Center, the largest medical complex in the world.
And I also get to work with incredible people in our community who are working at federally qualified health clinics and other locations providing incredible care. And I'm so grateful to hear from all of them frequently about the many issues that they face in trying to care for their patients, including the strain that increased uninsured rates will add to the whole health care system. I mean, it's really an ecosystem. And so when we talk about cuts here and changes there, it affects everything else. And we know that these changes to the health care system and these increased burdens are forcing hospitals and providers to cut services and reduce staff.
And we're only a few months into 2024. We've already started to see drastic losses. The Bureau of Labor Statistics reported in February, 28 thousand people lost their health care jobs nationwide, including some in my district. So we've covered a lot of issues here today, but there are other things happening in our hospitals that are also impacting access to care and to the health of our communities that we in Congress cannot continue to ignore. In fact, they arise not from the main topics that we have covered today, but from other policy decisions in Washington, including the Trump administration's immigration policies.
We just heard about the nursing shortage. President Trump instituted a new $100,000 fee for the H-1B visas, which are the visas that many health care workers rely on. This policy is gonna make it harder, not easier, to get a robust health-care workforce. But I wanna focus on the time that I have left on another. The Trump administration has ended a long-standing policy that prevented immigration enforcement actions in sensitive areas, including hospitals.
And since this new rule has been implemented, health care professionals have reported an influx of immigration enforcement agents in hospitals, and that the presence of these agents roaming the hospitals has left many people scared to go there. And recently, federal health officials agreed to give immigration enforcement officials access to a Medicaid database that includes enrollees' addresses and citizenship status. And despite a court challenge, the courts are allowing this policy to move forward, and that is creating fear in our immigrant communities. And in cities like mine where one in four people were born in a foreign country, in districts like mine where that number is 1 in 3, this has a huge impact on people's ability to access health care. And this includes legal immigrants who are getting swept up in this mess of immigration enforcement that this administration is pursuing.
And so I'm stating the obvious here, but if people are too afraid to go to the hospital because of immigration policies like these, they will not go, or they will delay going until they absolutely have to, when their conditions are worse and sometimes when it's too late. And so, you know, we saw that during the COVID-19 pandemic. We saw the disastrous impacts when patients do not delay access to care. And so I trust that all of you would agree that delayed care often results in increased cost of care as well. And I want to ask questions, but I've only got seven seconds left. I'm going to ask them for the record.
But what I want to know is from each of you hearing about what happens when a patient is forced to delay care for themselves, and what are the impacts on the overall health in our communities when we're delaying access to care for patients. Mister chairman, thank you for letting me go a minute or a second over my time, I yield back.
Speaker 1
General lady yields back. Now I recognize the gentleman from Ohio, Mister Ruley, for his five minutes of questioning.
Speaker 28
How are we doing now? Thank you, Mr. Chairman. This question goes to Miss Mitchell. The Department of Justice is suing Ohio Health over anticompetitive practices. Alleging their use of all or nothing contracts, or leveraging their market power to force plan sponsors to include all Ohio Health hospitals in the network at the expense of affordability.
This led to Ohioans paying more for benefits, with no increase in quality of care. So my question is almost a two-part question. Miss Mitchell, is there something that your members are seeing today that is impacted by this Ohio health maneuver? Should employees pay more because a hospital system has a monopoly on power, or are there alternative paths that we could choose?
Speaker 9
Well, I can't speak to that specific case, but we see that regularly across the country. When hospitals consolidate and you want access to any member of that system, it is harder to do that at a fair price when they are consolidated. And there have not been benefits in terms of better quality or access.
Speaker 28
So there's no example you could see in the country that would prove the opposite of that?
Speaker 28
Well, thank you so much, Miss Mitchell. With that, chairman, I yield my time.
Speaker 1
Gentlemen, yields back. Now recognize the gentle lady from Indiana, Miss Hatching, for her five minutes of questioning.
Speaker 29
Thank you, Mr. Chair. Before I get into my questions, I do want to make some clarifications. The democrats have made some accusations that we're trying to shift blame on the cost of health care because we've cut spending in Medicaid and Medicare. But, Medicaid spending has increased and is expected to grow from, it grew 8.6% in fiscal year 25, expected to grow in spending 7.9% in 2026. Medicare spending is projected to accelerate to 5.4% growth in spending annually through 2030.
So it is simply incorrect to state that House Republicans are cutting spending, even if we are spending less. Medicare and Medicaid spending is still increasing. Thank you to the witnesses for being here. Health care costs are a top financial concern for American families. I won't deny that.
One in three Americans is cutting back on daily spending to cover medical bills. Families are delaying major milestones, such as buying homes or having children, because of rising premiums. We do not have a functioning health care system currently. That has been driven in large part by the institution of Obamacare and principles that took the doctor and patient relationship and put in a great deal of middlemen. I consistently hear the same issues from providers in Indiana.
They're being squeezed from multiple directions simultaneously. Payment rates for Medicare have fallen roughly 33% in real terms since 2001, while practice costs are climbing. Administrative burdens consume resources that should be going to patient care. And the consolidation of market power in both the payer and provider markets is eliminating the independent practices that historically kept costs competitive and care personal. This is the third hearing we've had on affordability.
I think it may be the most consequential, because the provider landscape is where these issues meet real patients. Doctor. Azuse, in your testimony you note that practice costs rose roughly 63% over the same period that Medicare physician payments declined by roughly 33%, putting an increasing strain on independent practices and threatening patients' access to care, particularly in rural parts of the country. From your perspective, how is this sustained gap affecting patients' ability to access timely, quality care? What specific actions should Congress take to stabilize physician practices and prevent further disruptions?
Speaker 6
Thank you. So as I've noted, the decrease in real payment for Medicare services is accelerating independent physicians to close their offices or to sell their practices to private equity or to be employed by large systems. So, you know, the access is definitely impacted by that. People in their own communities can't access the private practice physician when they want to, and wait times are increasing significantly. And the biggest solution, as I keep emphasizing, is having a Medicare payment reform tied to the medical economic index with automatic inflationary updates just like the other providers are receiving.
Speaker 29
When was the last time that independent practices received an update for inflation?
Speaker 29
Would you favor tiering a system based on provider, areas that may be in a desert or a rural part of the country where independent practices might have a slightly different reimbursement rate than other systems to help keep them afloat?
Speaker 6
Well, I think it's not unreasonable to offer incentives for physicians to open offices in primary care deserts, for example, or in OB-GYN deserts. Mhmm. I think that's a creative approach. But I think the bottom line is all physician practices are substantially hurting at this point in time, and we need to do something to correct that in the form of an inflationary update.
Speaker 29
Thank you. In the remaining time I have, I wanna shift gears a little bit, continuing with you, doctor Azuse. The American Medical Association recently came out with a new statement on transgender surgeries for minors with gender dysphoria, now deferring that and recommending deferring treatment for that to adulthood. Can you comment on why the change or the clarification was made from the association?
Speaker 6
So I wanna be very clear that the policy of the American Medical Association is that individuals with gender affirming disorders should have access to the appropriate care.
Speaker 6
About minors. In surgery and minors, our belief is that it should generally be deferred until adulthood, but we respect the physician-patient-family relationship in determining that. And, we respect the fact that various medical societies that are experts in this care will be providing the appropriate input on when those sorts of surgeries should be performed. And I wanna also emphasize the number of such surgeries taking place in this country is remarkably small. Ranging from, some people say, 85 in one year to 220 out of a population of 300,000,000.
Speaker 29
I, respectfully, sir, I always comment that it doesn't matter if it's eighty-five or two hundred or one to the families that are impacted by that, if and to the individuals that have endured that as minors who have regretted that decision as adults. Thank you, Mr. Chairman. Yield back.
Speaker 1
Gently yields back. Now recognize the general lady of Massachusetts, Miss Trey Han, for five minutes of questioning.
Speaker 17
Well, thank you, mister chairman, and thank you to our witnesses for being here today. Republicans claim that their signature legislation isn't taking health care away from the people. But for me, the numbers just simply don't add up. States are being forced to grapple with a series of new federal policies all at once. Right?
We've got new Medicaid eligibility requirements, mandated paperwork requirements, six month redeterminations, limits on provider taxes and state directed payments, the expiration of enhanced ACA premium tax credits, reduced NIH funding, changes to H1B visas, and I could actually keep going. These changes put enormous pressure on state health care systems, and they force states into impossible choices, reducing services, cutting provider rates, and restricting eligibility for coverage. In Massachusetts, officials estimate the bill could cost the state 3.5 billion dollars annually in federal health funding and leave up to 300,000 of our residents without coverage. Now, as all of you know, when people lose coverage, they don't disappear from our health care system. They still get sick.
They still get injured. And they still show up in emergency rooms and safety net hospitals, an issue that's projected to increase demand on the Massachusetts health safety net by an estimated $550,000,000 by fiscal year 2028. States are projecting billions in lost health, federal health funding, and significant increases in uncompensated care. My colleague rephrase highlighted this clearly, but it bears repeating that these cuts will directly drive up costs and make it harder for people to access their care. So, Mr.
Pollock, when hospitals are forced to absorb those costs, what kind of service reductions or closures do we typically see in communities across the country?
Speaker 5
I would highlight the word communities because we're a very diverse country, and every community is different, and every situation is very different. So there's no question that this is going to cause great stress. There's no question that there are going to be clogged emergency rooms as we are the family doctor for the uninsured. And there will need to be some changes in terms of the array of services that are provided. Now I know there's been a lot of criticism about systems, in this discussion here today, but systems are able to better organize the delivery of care so that certain services may be provided in one entity and others could still provide it in the same location.
So there is real value to systems that we really haven't talked about. But we're very concerned about the impact on people. Yeah. Because if they delay the care, it's care denied, because they don't have the coverage.
Speaker 17
Yeah. We're seeing maternity wards close. That's not a hypothetical for Massachusetts. And when you can't get that care and that service close to home, it's pretty problematic for a woman carrying her child. And it's bad enough when hospitals are forced to close these services or maternity wards, behavioral health units, you name it.
But as you mentioned, when uncompensated care rises, hospitals still have to cover the costs, and that means higher prices for everyone else, particularly people with private insurance. So can you explain how increases in uncompensated care ultimately affect the prices that hospitals charge, commercial insurers, and what that
Speaker 5
Means for people with private coverage? You know, we have been very open to the fact that between regular chronic government and underpayment for Medicare and Medicaid, combined with an increase in the amount of charity care that is going to be provided, there's a car shift, and that affects the private sector because we have to stay whole to provide twenty four seven coverage for all of the things that we do. And as a result of those government underpayments, there is a cost shift there. And that's part of the reason you see costs rising on the private side.
Speaker 17
And we're seeing that with premiums. Mister Martin, beyond premiums, where else do costs of rising uncompensated care show up for patients? Are families seeing that in higher copays and prices for common services?
Speaker 8
Yes. I mean, actually, the high deductible health plans, we're seeing more cost sharing requirements on patients, which is creating offsets of them delaying or not pursuing health care, which accelerates disease states. Ultimately, they end up in a hospital, a higher-cost care setting.
Speaker 17
I appreciate. I don't have time for my final list of questions. I'll absolutely submit them, for the record. But I appreciate you being here and talking plainly about what we're seeing in hospital systems and the impact on its patients. Thank you.
Speaker 1
Gentle lady yields back. Now recognize the gentleman from New York, mister Langworthy. First five minutes of questioning.
Speaker 30
Thank you very much, Mr. Chairman. Today's hearing comes at a time when health care costs continue to climb, yet too many patients still have no clear sense of what their care will cost until after they receive care. We know that hospitals and insurers and others across the system all play a role in what patients ultimately pay, with hospital and provider services now making up more than half of the total health care expenditures in this country. Now, despite that, in most parts of the economy, people can compare prices before making an ultimate decision. And in health care, that's often not the case.
Patients move forward without knowing what they will owe or how prices compare across providers offering the same service. If patients are expected to make informed decisions, they need clear and consistent information before care is delivered. And without that visibility, it becomes much harder to understand what is driving cost across our health care system, and where those costs ultimately will fall. And with that, mister Pollock, I understand that he has expressed support for implementing advanced explanation of benefits and has worked with stakeholders to develop a mock claim approach to make that process workable. Can you explain how that approach would help ensure that patients receive accurate cost estimates before receiving care, and how you and your system are working with your insurer counterparts to make sure that information is consistent, reliable, and accurate for patients?
Speaker 5
We think that approach is really something that has promise, and commend you for your support and leadership in this regard because it'll give patients accurate information on the front end in terms of what they can expect in advance of their care. And I think that's what most patients really want to see. And as you said, we're working with stakeholders, and we wanna work with CMS and you all to move in this direction. I will say that we are deeply committed to providing patients with the information, the transparency that they need relative to the cost of care. There's we're all there on that.
But I would also share with you all that we are in a very confused state, and that's why this advanced EOB has a promise. You know, we've had the hospital transparency rule, then we had the health insurer transparency rule, then we had the No Surprises Act. And right now, it's kind of a jumble of different things as to where you get that, and that's why that approach is really important. Last point I can make I'd like to make, please, is that it's also important transparency is really important for shoppable services, but 60, I just saw a number. Over 50 percent of hospital admissions come through the ED.
The ACEP, the emergency physician society, say it's up to seventy percent. I don't know that you can shop around for those particular things, but regardless, we need to do better, and your suggestion is a way to do it.
Speaker 30
We need transparency across the entire system, and we can't get our arms around the entirety of our health care spend in this country until we truly understand where the dollars are going. Staying on transparency, Missus Mitchell, in your expert opinion, how usable is hospital price transparency data?
Speaker 9
It is increasingly usable. Unfortunately, we don't have good compliance. Estimates are that at most 69% of hospitals are fully compliant, so we need more transparent information. But once that information is available, self-insured employers can and are using it to identify who are the higher value providers in their community, or where can they maybe revisit some of the pricing when it is compared to other benchmarks. It is incredibly important for them to actually be fiduciaries and know if and when they are paying a fair price.
Speaker 30
Missus Mitchell, does PBGH support broader implementation of an advanced explanation of benefits? And how effective do you think it would be in improving price transparency for patients?
Speaker 9
We think patients and employers are absolutely entitled to full transparency upfront. It is simply unworkable when a patient goes in and comes out with a $100,000 bill. It is not responsible of the system to burden patients with that type of cost, and we need to give patients and purchasers the information they need to make good decisions.
Speaker 30
Well, improving price transparency in health care is critical to empowering patients and helping them understand what they have to pay before they receive the care. And, you know, certainly, departments, there's certain things that it's tough to, you know, guess what you're gonna pay after you're getting procedures in a car accident. But there are many predictable parts of our health care system that we can do that, and patients should be able to see the cost of care upfront, understand where their money's going, and make informed decisions before receiving treatment. Right now, too many prices are still hidden. We need better visibility across the health care system so that we can clearly see where the costs are coming from and who is ultimately bearing them.
And by bringing these costs into the open, we can create a more competitive system that works better for patients. I appreciate all the witnesses for being here with us today, and I yield back, mister chairman.
Speaker 1
Gentleman yields back just so that we can get the state of place, so that the witnesses will know where we're at. I appreciate your time. I have not yet gone. I'm gonna recognize myself. And then mister James, we may have somebody else that walks in that I'm unaware of, but I think that'll be the last.
But you never know. Somebody from the committee could walk in any second. So I will now recognize myself for 5 minutes. I raised it in my opening statement. Doctor G. D. Giorgio has raised it.
Doctor Joyce has raised it. I think Miller Meeks at least touched on it, and that is that the Affordable Care Act placed a ban on physician-owned hospitals. So for the whole panel, we'll make it easy. Just raise your hand if you support the ban on physician-owned hospitals. So if you raise your hand, you're against physician-owned hospitals.
Okay. And let the record reflect that, mister Pollock was the only hand that went up. I understand that means some of you may be ambivalent. I'm not trying to put you on record. I just wanna know where to go with my questioning.
And I would say that it's interesting because certain hospitals already receive special designations like our critical access hospitals. Critical access hospitals must be rural. They do have to be nonprofit and located more than 35 miles from another hospital. Mister Pollack, you support the critical access hospitals. Do you not?
So this is where the question comes in, because in order to accommodate widespread Stark Law concerns, I tweaked the physician-owned hospital bill. It's now called the physician-led and rural access to quality health care act to allow for physician ownership of rural hospitals more than 35 miles from a main patient campus or critical access hospital, in order to mirror the critical access. Because I represent a lot of areas where they want hospitals. We just filled that need just a few months ago in Patrick County, Virginia. A new hospital opened up.
And interestingly, while it had a corporate identity, it's run by doctors. It's got a corporate identity, but it's pretty darn close to a physician owned hospital. And this hospital had been closed for a number of years because none of the systems that you've referenced wanted to get involved, and this group has figured out a way to make rural health care in underserved areas a reality. Are you opposed to that form of physician-owned hospital as well?
Speaker 5
We're not opposed to creating access points for care in rural areas, for sure. The issue with physician-owned hospitals, different from critical access hospitals, is they're not full-service hospitals. A lot of them don't have emergency rooms. They don't take Medicaid. They don't care for the injun.
They're not open twenty-four seven. They take the easier, well-insured cases and call 911 when something goes bad, and ask us to come to the rescue. Okay.
Speaker 1
So what you're saying is if we created a model where they were open twenty-four seven and they had an emergency room, you'd be okay with a physician-owned hospital.
Speaker 1
Time runs fast as you heard Buddy Carter say. Time flies when you're sitting up here, and five minutes goes by like, quick. Doctor Di Giorgio.
Speaker 10
I think all the behaviors that he's describing can also be attributed to non physician owned hospitals. There's nothing special about a physician-owned hospital that prevents it from having an ER. In fact, there are plenty of physician-owned hospitals that do have ERs. There's plenty of physician-owned hospitals that have L and D units and that are open twenty-four seven. There's plenty of physician-owned hospitals that are super specialized, focused factories that do nothing but orthopedic procedures.
All of these physician-owned hospitals expand access to care and drive down prices. Talk about price transparency. Physician owned hospitals are leading edge on price transparency because they have to compete, and they have to show the people who come to their hospitals that they are competing on both price and quality.
Speaker 1
I appreciate that because I do think that long term and historically in a large rural district like I represent, it's larger than nine states by land mass. Historically, when you look at the histories of the various hospitals, even if they're not physician-owned today, they may have started out. Most of them did start out as a physician-owned hospital. Alright. Switching gears, I'm going back to you, Mr. Pallak.
In our hearing with health insurance executives, I raised the question or the issues that there have been negotiations for health insurance rates in my district in Virginia and Miss Harsh Parker's district in Tennessee. And I wanted to know if the insurance companies, how they reimburse larger systems versus smaller systems, and they just came back with a generic, oh, everything's a little bit different. Do you see that? Because I get the impression that larger systems get a better deal. What are your thoughts?
Speaker 5
It's uneven. I don't think it's a yes or no type of thing. I think one of the things you have to appreciate is that the insurance companies that these systems negotiate with are very large entities, and they are very concentrated. And when you negotiate a system with UnitedHealthcare, which is a $330,000,000,000 conglomerate that has immense my time.
Speaker 1
Is my time running out? What you're saying is it's hard to negotiate when you don't have as much competition and when you have big entities taking over the entire market and then dictating what happens. Is that what I'm hearing?
Speaker 1
Yeah. And it could be applied also to hospitals in certain circumstances. That ends up my time. I'll probably have some more questions for the record. I greatly appreciate all of you being here today, and I will now recognize the gentleman from Michigan, Mister James, for his five minutes of questioning.
Speaker 12
Thank you, Mr. Chairman. I'm so grateful for you having this hearing, and to our guests for being here. Let's be clear about this hearing today. Health care in America is not just expensive. It's deliberately opaque.
Patients don't know what health care costs are until the bills show up. Employers don't know what they're paying until premiums go up, and taxpayers are left holding the bag in a system that too often rewards consolidation over competition, and secrecy over accountability. We've heard today that consolidation is driving prices higher without improving the quality. In fact, hospital-dominated markets can raise prices significantly, sometimes by double digits, while limiting patient choice. We also know the rules that we're supposed to fix the system are not followed.
Nearly half of all hospitals are still not complying with the federal price transparency requirements. That's unacceptable. When prices are hidden, patients lose power. When patients lose power, prices go up. And when costs go up, families in Michigan and across the country are forced to make impossible choices between care and groceries, between prescriptions and rent.
This is exactly why I introduced the Patients Deserve Price Transparency Act. It's simple. If you're charging patients, you should be transparent with patients. Post the real price. Post the rates.
Make it accessible, accurate, and enforceable. Because transparency is not a partisan issue. It's a fairness issue. It's a competition issue. And most importantly, it's a patient issue.
We don't fix affordability without fixing accountability, and we don't get accountability without transparency. So, Miss Mitchell, you represent employers covering 21,000,000 Americans and spending more than $350,000,000,000 on health care annually. So let me ask you directly. If employers and patients cannot see real prices upfront, is it even possible to have a functioning health care market?
Speaker 9
It is not. We are 100% supportive of transparency. As a fiduciary, we are obliged to pay only fair prices. You can't do that without the information.
Speaker 12
Wonderful. And when prices are hidden or incomplete, who benefits more? The patient or the system is charging the price?
Speaker 12
Thank you. Miss Mitchell, you also highlighted even large employers struggle to access usable pricing data, and face barriers created by the system itself. At the same time, we know that federal transparency rules exist, but compliance is inconsistent at best, and enforcement is weak. If Congress were to require complete, accurate, and regularly updated price disclosures in uniform format, would that materially improve employers' ability to lower costs?
Speaker 12
Outstanding. Miss Mitchell, final questions. If every patient and employer had access to actual negotiated prices, cash prices, and comparable data before receiving care, would that increase competition and drive down cost system-wide?
Speaker 9
Absolutely. We need both competition and accountability. So much of the price distortion is just unexplainable in terms of the service provided. We need to be able to know where to go for the highest quality, most fairly priced service, and transparency enables that.
Speaker 12
Outstanding. And finally, is it fair to say that the more complete and enforceable the transparency requirements are, the more effective they will be at lowering costs for American families?
Speaker 9
Absolutely. Apparently, the industry thinks they're optional because they've had 5 years to comply, and they are still not complying. Complying. So I think enforcement is, at this point, warranted.
Speaker 12
That is unacceptable, and we should hold them accountable. Mister chairman, with that.
Speaker 1
I appreciate that. That was a question I hadn't had time to get to. So, Miss Mitchell, I've long supported the transparency because I think it brings about certain disruptors into the system. When you can see the transparency crisis, they figure out ways that they can make money by making the system better, lowering the cost for everybody. And one of those is to allow, with the transparency, to allow companies that come into the market to operate without a traditional network in the health insurance field, allowing members to see the licensed for any licensed provider induce, including non network or out of network doctors without penalties, and allowing patients to shop around for the best prices.
Would you agree that disruptors like that are a benefit in the long term to the system?
Speaker 9
I think everyone benefits if you can identify and go to the highest quality, most fairly priced provider, regardless of network.
Speaker 9
You can't. And then, to make it worse, a lot of these anticompetitive practices make it hard to exclude them once you have identified them. So it is a compound problem of lack of transparency and consolidation.
Speaker 1
I greatly appreciate it, and I yield back the remainder of Mr. James' time. And with that, that concludes all the questions. I don't see anyone else here wishing to ask questions. I ask unanimous consent to insert in the record the documents included on the staff hearing document list, including Mister Carter's request earlier for three documents, three articles that he wanted included. Without objection, so ordered.
I would like to thank all of our witnesses again for being here. Members will have additional questions. You heard several of them say so. I know I will. A number of people will have additional written questions for you after the hearing.
I remind members they have 10 business days to submit those questions for the record, and ask the witnesses to respond to the questions promptly. Members should submit their written questions by the close of business on Wednesday, April 1. That does not mean the questions will be foolish. They will be wise. But nonetheless, Wednesday, April 1.
Without objection, the subcommittee is adjourned. Thank you, witnesses.
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