Costly health care: Texas has an affordability crisis
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By Charles Miller for Texas 2036
Texas 2036 is a nonprofit organization building long-term, data-driven strategies to secure Texas’ prosperity through our state’s bicentennial and beyond.
For far too many Texans, health care has become unaffordable — to the point of being unobtainable. Barriers to affordable health care are preventing Texans from accessing needed care, contributing to unhealthy outcomes and high rates of medical debt. At Texas 2036, we are diagnosing what’s driving higher health care prices and advocating for concrete steps that policymakers can take today to address high prices across Texas.
Texans need more health care access
The high price of health care — even among those with insurance — is causing more than half of Texans to skip the care they need. According to a recent Episcopal Health Foundation survey, 56% of insured Texans reported skipping or postponing care due to costs.
For those receiving care, the prognosis isn’t much better. Nearly one third of Texas adults have unpaid medical bills.
Health care prices are increasing for Texas families and employers too. Average annual premiums to cover a family on employer plans in the state are more than $20,000 — almost one third of the median Texas household income of $67,404.
A lack of choices and transparency
These outcomes are partly the result of unhealthy markets exacerbated by anti-competitive practices. Our data shows that in 2020, 60% of Texas’ population lived in highly or very highly concentrated hospital market areas, limiting their access to affordable health care options. Compare this to 3% in California and 10% in Illinois.
“For Texans to be able to get the care they need, when they need it, at a price they can afford, the state needs to prioritize ensuring our health care markets are healthy. In healthy markets, providers compete on price and quality, and informed patients are able to shop around and benefit from choosing high-quality, low-cost care.”
A treatment plan to expand health care access
Establishing healthier markets is possible right now with a package of bills under consideration in the Legislature, each of which is part of a broader solution to make our health care markets healthy through a more informed, competitive and engaging system. Here’s what this would look like for Texans.
Informed markets must have transparency of information on both price and quality.
Too many Texans still can’t get meaningful price estimates in advance of medical services, a problem that is addressed by House Bill 3218 by Rep. Stephanie Klick, while Sen. Kolkhorst has authored Senate Bill 945, which expands existing price transparency requirements to a broader scope of providers.
Insurers are prohibited from offering enrollees information on the quality of providers, a problem addressed by HB 3351 by Rep. Caroline Harris.
Many Texans saddled with medical debt are unable to understand their charges. HB 1973 also by Rep. Harris — with companion SB 490 by Sen. Bryan Hughes — ensures that patients will receive an itemized, plain language bill.
Lastly, to help Texas researchers evaluate our progress on price and quality, HB 3414 and SB 2045 respectively by Rep. Tom Oliverson and Sen. Kelly Hancock unlock the potential of our all-payer claims database to allow more useful research to be conducted with the powerful data collected.
“Competitive markets must provide choices.”
Unfortunately, Texas’ hospital market consolidation is well above the national average and is spilling over into primary care services as physician practices are acquired by hospital systems.
HB 1692 and SB 1275 by Rep. James Frank and Sen. Hancock, respectively, reduce incentives for hospitals to buy physician practices, helping to also limit the growth of hidden facility fees for telehealth care.
HB 1001 and SB 605 by Rep. Giovanni Capriglione would allow insurers to offer additional options to better meet consumers’ needs. SB 1700 by Sen. Blanco and HB 4071 by Rep. Klick expand the ability of nurse practitioners to offer primary care services, increasing the number of choices of primary care providers. And HB 25 by Rep. James Talarico enables Texas to import lower-cost prescription drugs through a safe, FDA-approved process.
“Lastly, healthy markets must be engaged.”
Engagement in health care markets means that both patients and providers are appropriately incentivized to make beneficial decisions. Because so much of health care is paid for by third parties — employers and insurers — it is crucial to make sure that these health benefit plans are structured in ways that create appropriate incentives.
Employers and health plans can currently be prevented — by state law and large health corporations — from providing incentives that reward customers for choosing lower-cost, higher-quality options.
HB 711 and HB 2414 by Rep. Frank address these issues, freeing employers and insurers to design more intelligent benefit plans. HB 3098 by Rep. Ann Johnson appears designed to provide welcome nuance to that discussion, limiting the ways in which insurers might utilize those newfound flexibilities in plan design to increase referrals to provider groups they own. In all three of these bills, Texas 2036 supports the inclusion of a standard that requires the best interest of the patient to be taken into account.
And HB 2002 by Rep. Oliverson helps empower the 80% of patients who haven’t hit their deductible to be smart shoppers, regardless of whether a provider is in or out of their insurer’s network.
Texas is well positioned to act
“The 88th Legislature has an opportunity to build upon existing price transparency requirements, eliminate restrictions preventing disclosure of quality information, address the growing impact of consolidation and market power, and limit the potential of private equity from adding hidden fees to your bill.”
While increasing the flexibility of our health care industry to do right by Texans, the Legislature can also ensure when these new flexibilities are utilized, they are done so for the primary benefit of patients, not profits.
Over the years, Texas legislators have been adopting measures around hospital price transparency and elimination of surprise medical bills. Prioritizing healthy markets is the single most important thing the state can do to help empower employers to provide more affordable health care for their employees this legislative session.
Learn more about healthy markets at texas2036.org/healthy-markets.
