We all know that healthcare is expensive and often out of reach for too many people. However, healthcare costs can mean the difference between success and failure for small businesses by affecting their bottom lines and hindering their ability to hire employees.
Fortunately, members of Congress have proposals on their desks that can help cut healthcare costs for small businesses and their employees. Quickly enacting these bills will help the small business community gain access to the affordable health services they desperately need. It’s time to move these opportunities from the horizon to the now.
Late last year, the House of Representatives passed the “Lower Costs, More Transparency Act” (LCMT) with strong, bipartisan support. This legislation was a bold move toward making healthcare services more affordable, putting it in the “what’s working” column. The LCMT would pull back the curtain on healthcare prices and address hospital monopolies and the rising prices they are creating. This proposal also complements a broader effort in Washington to crack down on “junk fees” across all industries and address policies stifling competition and innovation.
Hospital consolidation, private equity and more have incentivized hospitals to drive prices up with no increase in quality, making healthcare less affordable. In fact, a House Committee on Small Business report found that hospitals without competitors within a 15-mile radius have prices 12 percent higher than markets with four or more competing hospitals. Higher prices lead to higher profits for healthcare providers, but small-business owners and their employees are shouldering the burden of these higher prices. Addressing hospital monopolies and prohibiting anti-competitive business practices are significant steps toward lowering costs and ensuring more small firms can offer quality healthcare coverage.
Enacting legislation that beefs up transparency and lowers healthcare costs is essential for small businesses because they have routinely ranked the cost of healthcare as a top issue for themselves and their employees. The Affordable Care Act was a game changer that allowed small-business owners, self-employed individuals, and small-business employees to afford healthcare.
But despite this progress, the ever-encompassing concentration of economic power facilitated by large hospital systems has contributed to the increase of costs and the decline of competition. We know that small-business owners believe in capitalism and the free market, but we don’t have a free market. We have a broken one.
Congress must do more to rein in consolidation and unfair billing practices, reducing costs and leveling the playing field for American small businesses. According to research, 82 percent of small businesses agree that larger companies have greater access to employee benefits like healthcare, putting their businesses at a disadvantage.
Small-business owners know that transparency promotes competition by allowing consumers to comparison shop. When you buy ice cream from your local ice cream parlor, you expect the price to be listed on their menu. And you certainly don’t expect the ice cream shop down the street to charge 50 percent more for the same cone. It should be the same for hospital services. Hospitals are using their market power to engage in anti-competitive, anti-free-market practices. The LCMT will address this by requiring hospitals to publicly disclose the price of healthcare services and ensure that patients are not charged more based on the location where the service was received.
By passing the LCMT, the House of Representatives has prioritized a policy solution that will decrease the powerful reach of healthcare systems that drive up prices without improving quality. While hospital monopolization may be a win for shareholders, it wreaks havoc on the American economy and small-business owners.
The Senate has a unique opportunity to propose healthcare measures that received overwhelming bipartisan support and also give Americans some relief from high healthcare costs. We urge senators to get serious about negotiating policies that will help to address healthcare price transparency and champion bills similar to the LCMT. This is needed to help curtail skyrocketing costs that continue to impose harm on the nation’s smallest job creators. It’s time to stop delaying progress and advance bipartisan, bicameral legislation that will have a meaningful effect on small businesses and all healthcare consumers.
