Sunday, June 24, 2018


NEW LAWS FOR AMERICA presents...............

TEN NEW LAWS WE ARE SUPPORTING TODAY

Focusing on: HEALTH CARE, DEBT FORGIVENESS, AND WORKER’S RIGHTS

New law to follow #1:
Medicare You Can Opt Into Act of 2017

HR. 2045 was Introduced in April 2017 by Rep. Carol Shea-Porter (D-NH). This bill would effectively create a Medicare public option.

Medicare actuaries would first calculate a premium for younger ages. Some form of drug coverage would be added to basic Medicare.

Then, anyone who wanted Medicare with its wide networks, low deductibles, and year-to-year reliability -- could enroll at any time of the year. There would be no underwriting, no experience rating, and no exclusions.

Here is a caution -- the actuarial premium for full Medicare will be at least $800 a month ($9,600 a year). After all, Medicare for seniors now costs over $11,000 annually.

Therefore, any version of this law will need to make full use of the ACA’s premium subsidies --and actually extend them.

As proposed In Sen, Diane Feinstein’s bill S.1307, no American should have to pay more than approximately 9% of their income for health insurance. The ugly “cliff” that now appears at 400% of poverty would disappear.

If a person made $50,000 a year, they would pay no more than $4,500 ($375 a month) for the Medicare public option. If the price of new Medicare was in fact $9,600 a year ($800 a month), then federal subsidies would cover the remaining $5,100.

Medicare will certainly appeal to persons from 55 to 65, who on the whole are treated cruelly by private insurance. There are least 2.5 million of these persons in the individual market today. Even if every single one of them took Medicare, and if the average subsidy was $5,100 each, this would only be $12.5 billion a year in new spending.

(Actually the total spending would be less, because some in this group would have received tax credits under existing ACA law. Also, the persons who take Medicare early could be required to pay more for Part B after they do turn 65.)

Medicare is under federal control, unlike Medicaid, and thus not subject to the financial pressures of each state. Health care providers generally accept the Medicare fee schedules.

Medicare also has a dedicated, broad-based tax, which can be raised as needed to cover more citizens. 
If Medicare attracts less healthy subscribers, the rates need not go up markedly. The government does not have to break even on premiums. Instead, the tax subsidies will go up. Private insurers will be left in the dust, which is fine with them as they have never liked the individual market.

This bill carries on the spirit of the Public Option Act” (H.R. 4789) introduced in 2010 by Alan Grayson (D-FL).

It is similar to the Medicare at 55 Act, recently introduced by Sen Debbie Stabenow (, MI) )
In addition, Reps Joe Courtney (CT), John Larson (CT), and Brian Higgins (NY) will shortly be introducing 
their own Medicare Buy-in Act.) 

Current Status:
Referred to committee


Contact the law’s sponsor
https://shea-porter.house.gov/contact/email
For details on the Feinstein bill:
https://www.dailykos.com/stories/2017/6/9/1670492/-Dem-Senators-OFFICIALLY-introduce-bill-to-fix- the-single-most-obvious-problem-w-the-ACA

New law to follow #2:
Improving Access to Affordable Prescription Drugs Act
Senate bill S.771 was introduced in March 017 by Al Franken, D-MN), Bernie Sanders (D-VT), Cory Booker (D-NJ), Bob Casey (D,PA), Sheldon Whitehouse (D-RI), Amy Klobuchar (DMN), Elizabeth Warren (D-MA), and 6 other senators.

House bill HR.1245 was introduced in the House by Elijah Cummngs (D-MD) and Lloyd Daggett (D-TX).

The law would require Washington to produce regulations for the widespread importation of drugs from other nations Canada at first, and any OECD country after two years.

Drugs would have to have the same active ingredient, same route of administration, and same strength as those approved in the USA.

American consumers would no longer be helpless against price-gouging by our pharma industry. Cost control will never really happen until buyers can say no, walk away, and find a near substitute.

For example:


Medication Name US Price for 30 days Supply Canada Average Price England Price Spain Price
Celebrex (pain) $330.00 $51.00 $112.00 $164.00
Copaxone (MS) $3,900.00 $1,400.00 $862.00 $1,191.00
Cymbatta (depression) $240.00 $100.00 $46.00 $71.00
Enbrel (immune) $3,000.00 $1,646.00 $1,117.00 $1,386.00
Gleevec (leukemia) $8,500.00 $1,141.00 $2,697.00 $3,348.00
Humira (arthritis) $3,049.00 $1,950.00 $1,102.00 $1,498.00

The law also contains a $2 billion prize fund for drug innovation. In order to receive prize funds, recipients must commit to offering their products at a reasonable price.

The law also makes it illegal for brand-name manufacturers to buy off generic producers, so that affordable drugs are kept off the market.

Of course the drug companies will resist. Way back in 2005, the District of Columbia passed a bill that allowed consumers to sue every time an American drug price exceeded OECD prices by more than 30%.

In 2012, Congress authorized US Customs to destroy any drugs obtained from Canadian pharmacies. 

The ostensible reason was to protect the public from dangerous counterfeit drugs. However, for the entire previous decade, during which millions of prescriptions were filled, not a single case of an 

American being harmed was ever reported.

The pricing of specialty drugs is an ongoing daily outrage. The hepatitis drug Sovaldi was developed in part with grants from the National Institutes of Health. The current seller (Gilead) set the price for 

Sovaldi at $100 a pill, even though the cost to manufacture 84 pills is less than $100. Gilead made back its entire initial investment in less than a year, and now is focused on reducing its U.S. taxes by 
$10 billion through yet another ‘corporate inversion.’

In many cases, the Canadian or English drugs are the same pills as the ‘American-made’ drugs, produced overseas in plants that have been inspected by the FDA. The only difference is that some of those drugs are shipped to countries with lower prices, and others are sent to the United States for price gouging.

Current Status: Referred to Committee

Contact the law’s sponsor: www.franken.senate.gov/?p=contact

New law to follow #3:
House Bill 2339 (Oregon) to regulate balance billing in hospitals

This law was introduced in February 2017 by Oregon’s Gov. Kate Brown.

If a patient unknowingly uses a non-network doctor in a network facility, that doctor cannot send a ‘balance bill’ for more than the insurer will pay.

Any disputed payment has to be settled between the provider and the insurer. Other progressive states are also making progress in this area.

New York and Florida protect the patient from paying more than the network charge, if they had no real choice of doctors. In New York, patients can complete an assignment form that relieves them of financial responsibility. The provider and the insurer can dispute the bill, and leave the patient alone. 

Repeated violations of these rules on surprise billing would be an unfair trade practice, with grounds for the revocation of a provider’s license.

California just passed Assembly Bill 72, whereby insurance companies are required to accept patient grievances for suspected inappropriate billing, and have 30 days to resolve the problem.

California’s AB 72 has other strong points, including:
  • It covers non-emergency services as well as ER crises;
  • Doctors cannot send balance bills immediately to collections -- only the in-network cost sharing
    amount can be demanded.
  • Doctors and hospitals must refund any balanced-billed charges they have already collected.
    Similar bills are pending in Arizona, Georgia, Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas and Utah.
    In addition, Sen Sherrod Brown has introduced a national balance-billing law called the End Surprise Billing Act (S. 284 ); and Rep. Lloyd Doggett (D-TX) has introduced companion legislation in the House of Representatives. (H.R. 817).
    Oregon’s law was signed by the governor and went into effect on June 22, 2017.
Current status:
Oregon’s law was signed by the governor and went into effect on June 22, 2017


Contact sponsors of the national law:
www.brown.senate.gov/contact/


New law to follow #4:
Discharge Student Loans in Bankruptcy Act

H.R. 2366 was introduced in May 2017 by Rep John Delaney (D, MD) and Rep John Katko (NY).

This would reform federal bankruptcy law to establish parity between student loan debt and other forms of debt. Technically, the bill would strike the student loan exception from Section 523(a)(8) of the Bankruptcy Code.

The law would be a lifesaver for students who have large loans, but unfortunately cannot get a good job.

Were these students unwise? Did they choose the wrong major? Shouldn’t they have resisted the easy accessibility of loans?

In many cases, the answer is probably yes.

But the whole purpose of bankruptcy law to help a person get over their mistakes, instead of being crushed by them for life

(Of course, a certain President of the United States has benefited six times from declaring bankruptcy.)

Today the only way to discharge a student loan is for ‘undue hardship’ . This is a lengthy, adversarial process costing at least $20,000 to $30,000 in legal fees. (The Department of Education even supplies attorneys to challenge these requests.)

It is important to recognize, however, that powerful people will lose money if loans are forgiven in this manner.

This includes the collection companies, the Wall Street loan securitizers, and the federal Department of Education.

No sympathy is needed for the collectors and investors. They are financial parasites, fastening on the misery of a generation.

Those who create securitized student loans (SLABs) expect the state to discipline student debtors, so that they make their payments on time. Private collection agencies are eager to cash in on commissions and special collection fees. (Example: When a loan defaults, the borrower must pay an extra 16% of the balance to guarantors and servicers, just to restart regular payments.)

These collectors can be vicious: attaching Social Security benefits, disability payments, and the income of any relatives who co-signed for the loans. Many debtors are too embarrassed or humiliated even to to tell friends and family about their debts, much less join a strike or a grassroots reform effort.

The Department of Education i.e. the federal government -- is on the hook for over $1 trillion of loan guarantees. The government will take a financial loss from easier bankruptcies.

Today there are about 8 million borrowers in default, with total guaranteed balances exceeding $137 billion.

But even if all these loans end up being cancelled, that is frankly a ‘bailout’ cost we have to accept.
(We readily paid much more than $137 billion to large banks during the 2008 financial crisis.)

We must also realize that future student loans will be harder to get if this law passes. Lenders will become reluctant to lend to students with unfashionable majors and no wealthy parents.

Therefore we must be ready to make more public colleges free, and to insist that education be funded with grants rather than loans. (see New Law #6 in this issue.)

(This bill continues the effort of the Fairness for Struggling Students Act of 2015, sponsored bu the Senators Sheldon Whitehouse, Al Franken, Richard Blumenthal, Patty Murray, Jack Reed, Elziabeth Warren, Ron Wyden, Tim Kaine, Brian Schatz, Kirsten Gillebrand, and Mazie Hirono.)

Current Status:
Referred to Committee

Contact the Sponsors
https://delaney.house.gov/contact https://katko.house.gov/contact/email

New law to follow #5
Relief for Underwater Student Borrowers Act


H.R. 5239 was introduced in July 2014 by Reps Mark Pocan (D, WI) and Frederica Wilson (D-FL). (A very similar bill -H.R. 5617- was introduced in July 2016 by the same legislators.)

Under this law, the borrowers who have their loan balances forgiven ---after diligent, consistent repayment --- would be exempt from income taxes on the amount forgiven. (no matter when they started their repayment program.)

This law would assist the millions of students who do not intend to declare bankruptcy. However, they face large taxes when they complete income-based repayment programs.

In many of these repayment programs, the actual loan balances will grow even while payments are made, especially if the student earns a modest income. The amounts forgiven after 10 or 15 years will be substantial, and so will the potential income taxes.

However, tax forgiveness is just part of accepting that student loans have been a destructive policy. 

Relying on loans to pay for a public good like education is not a natural phenomenon

Public goods should be financed from the state through taxes. Germany recently made tuition free at public universities, saying that “anything less would be unjust.” We can do something close to the same.

Current Status:
Referred to Committee

Contact the law’s sponsors:
https://pocan.house.gov/contact https://wilson.house.gov/contact

New law to follow #6:
The College for All Act of 2017

Senate bill S.806 was Introduced on March 2017 by Sen Bernie Sanders. This bill provides at least $41 billion a year, mainly from a new financial transactions tax, in order to eliminate undergraduate tuition and fees at public colleges and universities.

House bill HR. 1880 was introduced by Jayapal Primila (D, WA).

Students from any family making less than $125,000 could go to a university with no tuition.

In addition -- All students regardless of income could attend community college for free.

Pell grants would remain, but they could be used for living costs since tuition will be free.

Work ̈study programs would also be expanded, so that students are not taking loans just for living expenses.

These bills are not perfect right now. We are skeptical that $41 billion can be raised so easily from 
Wall Street, or that $41 billion would be enough to make places like Berkeley free of change. We are also skeptical that all states will pay their share of funding under this bill. And frankly, we are uncomfortable with taxpayers supporting the bloated staffs and salaries at some universities.

For much less tax money, we could at least make vocational schools free. These fine institutions help many students to get good jobs, especially adults who are changing careers. We can also fund apprenticeships much more than is done today.

It is amazing that we ignore the great success of the GI Bill after World War II. This was probably the most economically productive and job-stimulating program in American history, and it certainly did not rely on loans. The recipients not only paid no tuition they were paid a stipend to go to school, just as in Denmark today.

Current Status
Referred to committee

Contact the sponsors:
www.sanders.senate.gov/contact/
https://jayapal.house.gov/contact

New law to follow #7:
Wage and Garnishment Equity Act of 2016

HR 5664 was introduced on July 2016 by Sen Jeff Merkley ( and Rep Elijah Cummings ( It would limit the access of debt collectors to paychecks or bank accounts.
  • Workers making less than $580 per week would be totally exempted from any garnishment.
  • For others, the maximum garnishment rate would be reduced to 15%.
  • Bank accounts would be completely protected. (Right now, debt collectors can wait until a
    paycheck is deposited into a bank account, and then swoop down and confiscate the entire account.)
    We would like to see this law actually expanded.
  • Lawsuits for debt collection should be limited to debts with a principal over $5,000.
  • Attorney fees on collector lawsuits must be limited. The kind of attorneys who sue small, poor consumers deserve no respect whatsoever.
  • Also, there should be no interest charged or extra penalties on judgment amounts.

Current Status:
Referred to committee

Contact the sponsors: http://www.merkley.senate.gov/contact/ https://cummings.house.gov/contact


New law to follow #7:
Workplace Action for a Growing Economy Act

S. 2042 was introduced by Sen Patty Murray in 2015.


This law would amend the National Labor Relations Act (NLRA) to increase workersrights, as follows:
  • Triple the back pay for workers who are fired or retaliated against because they engaged in collective actions;
  • Provide for federal court injunctions to immediately return fired workers to their jobs
  • Ensure that the employer that actually controls wages is jointly responsible for violations caused
    by their franchisees.
    This law should be supplemented by a vast increase in the right of workers to sue for wage theft; plus, the re-creation of the Legal Services Corporation to assist them for free.
    If we cannot have strong unions, we can at least make it much easier to harass low-road employers. 
Current Status:



Contact the sponsors:
http://www.murray.senate.gov/public/index.cfm/contactme


New law to follow #8:
Austin’s Better Building Program

This is not a law, but an excellent model program.

In Austin, a construction firm may get favorable treatment in any bidding for construction work if it does the following:
  • Pays a living wage of $13.50, or the prevailing wage, if higher
  • Covers all employees with workers compensation insurance
  • Offers paid time off and health insurance
  • Affirms the right of their employees to join unions
  • Allows a monitor on site to speak with workers

Since 2014, this program has helped over 14,000 worker obtain better benefits.

It is vital that we support high road employers. One method is a series of Model Executive Orders, which give progressive firms an automatic advantage when bidding on government work of any kind.

We should also look for ways to penalize low-road employers. For example, a restaurant that commits wage theft should have their health permits revoked.

We do not make enough use of publicity against bad employers. In a recent survey, 75% of Austin residents said they would not go to a restaurant or stay in a hotel if they knew that the firm had violated labor laws.

Of course in the long run there is no substitute for unions. Governments would help the union cause immeasurably if non-union firms were barred from any federal, state, or local contracts.

If governments gave no contracts to firms that send jobs abroad; authorized that no travel dollars were spent at hotels and restaurants that exploit their workers; and funded no research in colleges that underpay their adjuncts....these would be giant steps towards improving workers rights.

Current Status:

Contact the sponsors:
http://www.workersdefense.org/

New Law to Follow #9
Paid Family and Medical Leave Insurance Act HR. 3087

Under an Oregon bill introduced by Reps. Jennifer Williamson and Diego Hernandez, the state would impose a very small payroll tax to pay for this benefit. Half a percent of every worker’s pay would be routed to the fund, and employers would match the amount. A worker making $40,000 a year would bring home $16.67 less per month.

Employees who go on leave would be paid over 80 per cent of their wages. For childbirth, paid leave would last up to 18 weeks.

(Canada, France, Germany, Norway, and Japan all offer family leave for six months to a year, with payments of 55 per cent to 100 per cent of salary.)

It is important that the burden of paying for this is spread across all firms and workers. In that way, employers will not need to discriminate against young mothers or those with elderly dependents. 

There need be no exemptions for small businesses, any more than small businesses are exempt from paying Social Security taxes.

A number of states have offered unpaid leave, and for larger companies only, for some time.
But New York, Rhode Island, and California have already passed universal paid leave bills. This must spread further.

Current Status:

Contact the sponsors:
Rep.JenniferWilliamson@oregonlegislature.gov 
Rep.DiegoHernandez@oregonlegislature.gov

New law to follow #10:
Ban the Box and Fair-Chance programs

These laws remove the “box” on job applications, which asks about arrest histories before any other information is provided. This discourages many employers from even considering an otherwise qualified candidate.

Currently, 27 states and 150 cities have adopted some form of ‘Ban the Box.’ Large businesses including Target, Walmart, Starbucks, and even Koch industries either ask no questions, or only inquire about recent convictions. Background checks are only ordered later in the job review process.

However, given the catastrophe of mass incarceration -- especially from the hideous War on Drugs -- more reforms are needed.

We can start with the automatic sealing of juvenile arrest records (now the standard practice in Connecticut and Pennsylvania)

We should require employers to perform a brief ‘case by case review’, for any applicant with a record. This would consider:
  • The age when convicted
  • The gravity of the offense
  • Whether the offense is related to the position
The goal is to do away with any policy that automatically excludes persons with any arrest record.

EXTRA FEATURE...................... ‘ASPIRATIONAL LAWS

The following are statutes which do not have current sponsors but laws like these should be promoted, drafted, and enacted.

1. Creating Specialized Health Courts

Anyone who feels they were overcharged could receive a hearing on their grievance.

The courts will be staffed by physicians and judges. All court costs will be paid by the federal government, probably about $500 million a year, and the patient will not need an attorney.

The courts will have authority to reduce or even cancel medical bills. Here are the types of bills that can be challenged:
  • Double charges for anesthesiology (by the nurse-anesthetist and the anesthesiologist)
  • Separate hospital bills for medical supplies such as oxygen and cardiac monitors (that are part
    of standard equipment in any ICU)
  • Extra billings for ‘facility fees’ (where a doctor charges extra because his office is considered part
    of a hospital)
  • Padded bills for basic lab tests i.e. $350 for a blood profile that can be purchased for $31 in
    any free-standing private lab. Often the doctor’s testing machine will be paid for in less than a
    year of normal usage, and everything after that is pure profit.
  • Outlandish charges for diagnostics -- i.e. $5000 for an echocardiogram that costs $350 to cash
    buyers, and for which Medicare reimburses $275.
  • $50,000 in charges for an air ambulance trip that only costs $7,000.
  • $4,000 for a drug infusion that costs $750 in Italy or Britain.
  • $35,000 for an artificial knee, that costs about $700 to produce in labor and materials
Please note: A patient can go to Health Court even if they are insured.

For example, if your insurer approved $5000 for an echocardiogram, and this left you with a bill for $4000 after your deductible and coinsurance, you may still have a grievance.

The hearings in these courts will be in the public record. Hospitals and doctors will hopefully stop some of their price gouging voluntarily, just to avoid the (well-deserved) bad publicity.

2. Adopting German labor law.


This would entail a series of national, statutory protections applying to all American firms -- large and
small, union and non-union.


These new labor standards would effectively become civil rights. Germany’s labor codes state the following:
  • In Germany, there is no such thing as “employment at will”. By law, German employees must have written employment contracts that reflect the key aspects of the employment relationship
  • German labor and employment law grants a statutory claim for 20 working days’ vacation per calendar year for employees who work a normal five-day week (i.e., four weeks’ vacation
  • German labor and employment law requires the continuation of full salary payments for a period of six weeks in case of sickness of an employee (under certain circumstances, the employer has to continue payments for up to 12 weeks).
  • Female employees are entitled to full paid maternity leave (starting no later than six weeks before the expected due date— depending on the mother’s and baby’s health situation and the work performed by the woman—and ending eight weeks after childbirth). .
  • All employees, both male and female, are entitled to a maximum of three years’ parental leave per child. During this period the employer is not obliged to make any payments to the employee. However, the employer may not terminate the employee.
  • German employment termination law is regulated by various codes and is intended to give the employee maximum protection against unfair dismissal. The employer has to give a written notice of termination to the employee.
  • If a company engages in a mass layoff (which is deemed to occur when the employer intends to dismiss a large percentage of its employees during a one-month period) prior approval by unions and the national employment office is required.
The insults that American workers take for granted are often prohibited in Germany.

For example: After the brewer Heineken outsourced cafeteria services, the winning contractor promptly cut wages by more than half. Local courts then prosecuted Heineken, which restored full wages and made back payments to the workers who lost the most income.

For example: The European Court of Justice recently ruled that the time spent commuting to work must count toward the paid eight-hour day.
Faced with the equivalent of German labor law, American employers would just have to adapt.

Even now, American firms conform to such labor laws all the time when they open factories in northern Europe.

The American cheap labor party (aka the Republicans) has predicted the onset of dire, terrible crises with the enactment of every social reform.

They predicted disaster when we ended child labor, established the eight hour day, allowed female voting, passed the Civil Rights Acts, and funded Social Security and Medicare. They have been proven wrong every time, of course.

Decent employers will make peace with new workers’ rights --maybe not cheerfully or immediately --but within a few years. As for the stingiest, most predatory employers.....we must make sure they are a tiny minority. The most exploitative industries in America-- food, retail, construction, agriculture-- will not change overnight ---but they will improve if the pressure is endless.

Workers in other nations did not get paid vacations, decent pensions, and social services because they were exceptionally productive. They demanded these benefits no matter what, and they got them.

HOW YOU CAN HELP

New Laws for America is a website that is dedicated to promoting progressive reforms. To be honest, we liberals are quite a bit behind the right wing in this regard.

Conservatives actually use three well-funded networks to promote new laws year in and year out:
  • The State Policy Network, which spews out studies on right-to-work laws, pre-emption laws, anti-consumer laws, anti-environmental laws, et al;
  • The Americans for Prosperity staffers, who run radio and TV ads and spur activists to contact legislators;
  • The American Legislative Exchange Council (ALEC), which prepares model bills, offers staff help to legislators, and arranges contacts with lobbyists.
Websites like mine are at least a starting point.

You are welcome to reprint any documents or articles from New Laws for America.

Also, you may be interested in having New Laws for America as a regular column on your website or in your newsletter. Each column could highlight one or two new laws in the public sphere.

Please contact:
Bob Hertz
Bob.hertz@frontiernet.net
newlawsforamerica.blogspot.com

Wednesday, October 4, 2017

THE MEDICAL COST REDUCTION ACT OF 2017

FOUR NEW LAWS TO MAKE HEALTH CARE CHEAPER  

Law #1 -- Establish A National Fee Schedule for Emergency Procedures

For unscheduled hospital admissions and surgeries, patients cannot realistically “consent” to provider charges.

The documents that patients must  sign to “pay whatever is charged”  or to “ pay whatever your insurance does not cover” are what legal scholars call ‘procedurally unconscionable.’

The patient  must agree to the terms of the providers.  The only way to receive desperately-needed care  is to accept whatever charges are assessed. The patient is simply assumed to have provided informed consent to any procedure, and to any fee from any provider. This is not normal commercial practice…..instead it is naked force. And it must change, with the following new rules:
  • In emergencies, the charges  to an uninsured or ‘out of-network’ patient must not exceed 150% of the lowest basic charge in the Medicare fee schedule. (i.e., no upcoding)
  • Hospitals can no longer use their “chargemaster” rates to bill the uninsured.
  • Doctors called in for emergencies cannot charge 800% of Medicare, as they often do today.
Any provider who tries to bill above the allowed rates, for patients who are clearly unable to provide informed consent, will be considered guilty of consumer fraud. Not only will their bills be uncollectible, they could be charged criminally in the most egregious cases.  

For a long time now, the operating principle in health care has been “the more you bill, the more you make.” We want a new system where a provider can be harmed by raising prices.

Examples:
Name of Procedure Average ChargeMaster Price 150% of Average Medicare Price
Chest pains treated in ER $25,556 $4,591
Pneumonia and Pleurisy $52,865 $11,526
Transient Ischemia $30,182 $5,668
ER visit for a fall – no broken bones $9,149 $2,139
Full metabolic panel, done in hospital $7,302 $257

Hospitals can keep their chargemasters for insurance negotiations, or to collect on Medicare ‘outliers” -- but no patient can be billed that way ever again. Connecticut has largely imposed this rule for the uninsured, but that is one small state in a very large nation.

Hospitals will claim mightily that they cannot get along on the Medicare fee schedule, or close to it . . . But frankly, many American hospitals are overbuilt, over-staffed, over-equipped and overpaid. 

However, safety-net hospitals should still receive federal aid for emergency care. The emergency room is in part  a public service, i.e. part of our infrastructure – and taxpayer funding must play a role.

For example, EMTALA regulations require hospitals to  stabilize any patient, regardless of payment – but EMTALA has never had any  funding! Hospitals are even required to try and collect from patients, before getting federal help for bad debts. This is all dishonest:  If we demand that hospitals provide a public service at less than full charges, then we must compensate the hospitals.

If it costs $20 billion more per year in new federal  funding to maintain our emergency care system, this is acceptable. It is better for all taxpayers to bear some amount in taxes, versus single patients being charged astronomical amounts. Most other countries do not expect hospitals to survive on user fees alone.   

Ambulances should be paid for through taxes immediately. Fire departments are often providing the service already; therefore, the taxes we pay for fire departments should increase.

These new limits on ER charges will not lower the cost of health care by themselves. But they will remove the monstrous insult of chargemaster billing.

Laws #2 and #3 -- Bring Down High Drug Prices

Law #2 -- Remove all bans on imports

If a drug has been approved by other first-world nations, this would constitute automatic approval by the FDA.

Consumers could then purchase any drug from a foreign nation, at the foreign nation’s price.

In 2012, Congress authorized US Customs to destroy any drugs obtained from Canadian pharmacies. The ostensible reason was to protect the public from dangerous counterfeit drugs. However, for the entire previous decade, during which millions of prescriptions were filled, not a single case of an American being harmed was ever reported. 

Sample OECD prices for drugs:
Medication name US Price for 30 days supply Canada's Average Price England's Price Spain's Price
Celebrex (pain) $330 $51 $112 $164
Copaxone (MS) $3,900 $1,400 $862 $1,191
Cymbatta (depression) $240 $100 $46 $71
Enbrel (immune) $3,000 $1,646 $1,117 $1,386
Gleevec (leukemia) $8,500 $1,141 $2,697 $3,348
Humira (arthritis) $3,049 $1,950 $1,102 $1,498

(From the International Federation of Health Plans 2013 Report)

The pricing of specialty drugs is a daily outrage. The hepatitis drug Sovaldi was developed in part with grants from the National Institutes of Health. The current seller (Gilead) set the price for Sovaldi at $100 a pill, even though the cost to manufacture 84 pills is less than $100. Gilead made back its entire initial investment in less than a year, and now is focused on reducing its U.S. taxes by $10 billion through yet another "corporate inversion."

The only way we will ever have lower drug prices is for the payers to be able to say no, and walk to a near substitute.

In many cases, the Canadian or English drugs are the same pills as the ‘American-made’ drugs, produced overseas in plants that have been inspected by the FDA. The only difference is that some of those drugs are shipped to countries with lower prices, and others are sent to the United States for price gouging.

Of course the drug makers will try all their legal tricks:  paying off the competition, making a slight change in a drug to start a new patent, or even parking their patent with an Indian tribe to avoid American court challenges. We must be sure that all of these fail.

Law #3 -- Eliminate FDA approval of new generic medications

The price gouging around Epipen would have ended quickly, if new versions of genetic drugs did not require an approval process. We should let reputable drug companies produce whatever generic drugs they want.

Companies must be prevented from ‘stealing’ popular and effective drugs that have been in the public domain for years, and then claiming them as private property until their competitors can slog through FDA approval. By the time the FDA gives anyone else permission to compete, the price gougers will have made their fortune and can move on to their next scheme.

Here is a quick solution -- Get rid of FDA approval on generics!

If an office products company like Staples tried to charge $50 for a box of paper clips, a competitor would have a price of $1 on the street in a week.  

But not in the drug industry!  Thanks to the FDA, Staples would be protected for years even though no patent is involved. Competitors would be bogged down for years in litigation, or in waiting for the FDA to prove that no one could cut their finger on a non-Staples clip.

All this would be happening while Staples spends millions of dollars lobbying Congress, and some people would do without paper clips altogether unless they had really good  insurance.

We do not need the FDA to take over two years reviewing competitive generic drugs, when the original version has been on the market for years and pose zero danger to anyone.  Here is one area where deregulation is definitely the answer.

Law #4  -- Establish Health Courts, where patients can challenge medical bills

Anyone who believes they have been overcharged will have access to  specialized Health Courts, where they can receive a hearing on their grievance.

The courts will be staffed by physicians and judges. All court costs will be paid by the federal government -- probably about $500 million a year -- and the patient will not need an attorney.

The courts will have authority to reduce medical bills.

Here are the types of bills that can be challenged:

  • Double charges for anesthesiology (by the nurse-anesthetist and the anesthesiologist).
  • Separate hospital bills  for medical supplies such as oxygen and cardiac monitors (that are part of standard equipment in any ICU).
  • Extra billings for ‘facility fees’ (where a doctor charges extra because his office is considered part of a hospital) – where an echocardiogram that cost $350 one year then costs $1600 after the doctor’s practice was purchased.
  • Padded bills for basic lab tests – i.e. $350 for a blood profile that can be purchased for $31 in any free-standing private lab. (Often the doctor’s testing machine will be paid for in less than a year of normal usage, and everything after that is pure profit.)
  • Outlandish charges for diagnostics -- i.e. $5000 for an echocardiogram that costs $350 to cash buyers, and for which Medicare reimburses $275, or $4000 for an MRI that costs $200 in Japan.
  • $50,000 in charges for an air ambulance trip that only costs $7,000.
  • $4,000 for a drug infusion that costs $750 in Italy or Britain.
  • $35,000 for an artificial knee, that costs about $700 to produce in labor and materials.
  • $12,000 for a colonoscopy, just because it is done in an academic medical center.
Please note: A patient can go to Health Court even if they are insured.

For example, if your insurer approved  $5000 for an echocardiogram,  and this  left you with a bill for $4000 after your  deductible and coinsurance, you may still have a grievance.

We need such courts, because traditional lawsuits are not adequate. A $5,000 surprise bill may be financially significant to a patient, but it is not enough for a private attorney to take the case, and not large enough for the state attorney general to pursue.

There is no shortage of case law to assist the plaintiffs, including the doctrines of:

  • Unconscionable pricing
  • Lack of mutual assent
  • Fraudulent non-disclosure
  • Undue influence
  • Unfair trade practices
This is not to say that patients will win every single case in health courts. Sometimes the cost of a procedure is in fact explained to the patient in advance, and is in fact reasonable in light of the resources required.

The main target of the courts is blatant price-gouging, with no added medical benefits, which is imposed on patients who have no opportunity to select otherwise. “Charging what the market will bear” is not an acceptable principle for medicine. Entire areas of health care are dominated by unfair trade practices.

State legislatures or Congress can enact  general standards for what constitutes a reasonable range of charges. All relevant information can be considered by the Health Court, including  payments made by public and private payers -- Medicaid, Medicare, and other insurers.

Once a complaint gets to Health Court:

  • All bill collections are suspended while a patient is waiting for a hearing. Sending a disputed bill to a collection agency would be an unfair trade practice, with real legal consequences.
  • The results of all hearings will be published. This in itself will give providers a strong incentive to avoid Health Court, by restraining their charges upfront.
Any ‘Gag orders’ that  prohibit the disclosure of insurance payment rates will be unenforceable.

CMS shall publish its full schedule of Medicare rates, to further assist patients in analyzing prices and getting ready for Health Court.

There have already been a small number of patient victories in the courts -- see the following citations.
We just need many more victories!

BENEFICIAL EFFECTS OF THE NEW LAWS

Thanks to these laws, it will be easier to survive without private health insurance.

And not a moment too soon! In the ACA’s individual insurance market, many policies are already financially worthless.

For example: If a 60-year old man is in decent health, why should he buy a policy that costs $950 a month and has a $4,000 deductible?

If he is unsubsidized, he will pay over $11,000 a year for basically nothing unless he is hospitalized, and even then he must pay another $4,000 before any benefits kick in.

How much uninsured health care could he buy for $15,000 a year?

He can buy a blood count for $31, an X-ray for $47, and an MRI for $275 from consumer-direct providers in most cities. With the new drug prices described above, he can pay for most of his prescriptions out of pocket.

At the Surgery Center of Oklahoma, he can purchase:

  • Arthroscopic knee surgery --$5,300
  • Rotator cuff repair --$8,260
  • Leg fracture repair - $6,375
  • Inguinal hernia -- $2,010
  • Hysterectomy - $8,000 (for his spouse)
  • Tonsillectomy -- $3.050 (for his child)
  • Carpal tunnel release - $2,750
There is still a role for catastrophic insurance, however. Almost no one has the cash to pay for bypass surgery, advanced cancer, septic shock, respiratory failure, or major injuries. Complex surgeries and long rehabilitations are not really quotable.

This catastrophic insurance should cost less than our current qualified plans --- but  still, there will be some who do not buy it.

The answer might be an extra income tax, which enables the purchase of Medicare Part A. (This would replace the original ACA penalty for not having conventional health insurance.)

In practice, the person who refuses to buy private health insurance will pay a small amount of extra federal income tax. In exchange, they will be protected against large hospital bills by Medicare Part A. The hospitals will get paid also. If the average uninsured person pays about $1,000 a year in taxes, this should cover the new benefit.

Part A covers hospital room and board, and after a $1,360 deductible and no coinsurance, at least for 60 days of inpatient care. Part A does not cover doctor’s charges, so the persons who stay uninsured will still have some exposure.

CONCLUSION

Many aspects of health care are only expensive due to monopoly rents – especially drugs, minor surgeries, and outpatient care. We must  chop away at these areas. 

But “chopping away” does not just mean high-deductible health insurance, where vulnerable patients have “more skin in the game.”

This can be a cruel form of cost control. It relies on the patient to deny themselves care; also, it expects the patient  to ‘shop around’ in a manner that can harm the doctor-patient relationship.  

(Besides, the citizens of Canada, Germany, France, Sweden, and Japan have almost no ‘skin in the game’ by our standards–but those countries somehow control health costs.)

The struggle to make health care cheaper must feature some degree of old –fashioned government force, such as:

  • Strict regulations on hospital billing
  • International competition for drug companies
  • Punishing price-gougers both legally, and through bad publicity, in health courts
The fight against medical price-gouging will be endless, but it also needs to start tomorrow!

I welcome any comments or questions that you have. If you wish to reprint all or part of this article, just let me know. There will be no charge to do so. I want to "spread the word" for real cost control.

Bob Hertz
          bob.hertz@frontiernet.net