Rural communities need less healthcare regulation, not more
Washington Examiner
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People in rural communities in the United States, more than in other high-income countries, are skipping healthcare because of costs, according to a new survey from a liberal think tank. But the answer to rural healthcare needs is not more regulation, as the liberal think tank wants. It is a rollback of the very government policies that are encouraging high prices and fewer services in rural areas.
According to the Commonwealth Fund’s 2020 International Health Policy Survey, almost 40% of rural adults reported skipping needed medical care due to costs. This compares to just 25% in Australia and 7% in Norway. The solution to this problem, according to the Commonwealth Fund, is more government regulation, specifically a “universal healthcare system” in which everyone has “access to primary health coverage free of charge.”
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But it is the federal government’s last huge push to guarantee universal health insurance that caused this mess in the first place. The architects of Obamacare were firm believers in the mantra that for healthcare, “bigger is better.” That is why Obamacare contained specific provisions designed to incentivize consolidation in the healthcare sector so that hospitals and insurers were incentivized to merge into larger, presumably more efficient, entities.
This is why Medicare’s payment rules were changed to favor “Accountable Care Organizations” that would be paid by enrollee instead of by service provided. The thinking was that ACOs could more efficiently provide care for Medicare enrollees across services provided and then pocket the difference between what would have been paid per service and the higher per-enrollee total. Medicare also flat-out just paid hospitals more than individual practitioners for the same service.
These two rules, along with other reporting and record-keeping regulations that raised the cost of providing care, led to a wave of mergers after Obamacare became law. One study found that the number of hospital mergers doubled in just the first five years after Obamacare passed Congress.
But instead of greater healthcare consolidation leading to better access and lower prices, the opposite happened. One Federal Trade Commission paper found that communities where hospitals had recently merged saw prices increase 50% compared to communities without recent hospital mergers.
And rural communities often suffer the most from these mergers. One study found that recently acquired rural hospitals were more likely than those that remained independent to shut down their maternal, neonatal, and surgical care services. It is far more efficient for large healthcare conglomerates to shut down scattered rural offices and consolidate in one more urban setting. Problem is, these regional healthcare monopolies leave rural communities with no real healthcare competition. They are left at the mercy of bean counters in far-away urban areas.
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It doesn’t have to be this way. For starters, Congress can begin to undo some of Obamacare’s damage to rural communities by undoing preferential treatments for consolidated care. States could also do their part by repealing “certificate of need” laws that make it harder for competitors to open new healthcare facilities.
Rural communities don’t need the one-size-fits-all solutions that the Left keeps trying to force upon them. Obama-era corporatism isn’t the answer to rural healthcare needs. Loosen the regulatory requirements on healthcare providers, stop incentivizing consolidation, and let rural communities find the solutions that fit them best.