Alex Garlick worked in Congress during the 2017 debate over whether to repeal the Affordable Care Act (ACA), which was one of the most memorable years for federal healthcare policy in recent memory.
He’s now a political science professor at the University of Vermont, Burlington, Vermont, where he analyzes the ability of healthcare lobbyists to wield influence and shape policy reforms, and how that ends up increasing prices for everyone. Garlick’s research on the topic and his own experience in Congress served as the foundation to write a new book, “Pre-existing Conditions: How Lobbying Makes American Health Care More Expensive,” which was published in October.
Garlick talked to Medscape Medical News for a Q&A about his book and what his research tells us about how special interest spending can block wide-scale changes in the healthcare system and what can be done to combat lobbying efforts and reduce healthcare costs. Answers have been lightly edited for length and clarity.
Why did you decide to write this book?
I worked in Congress in 2017, when the effort to repeal and replace the ACA was going on, so that was really like a front-row seat to see just how many interests and lobbyists were involved in the issue. And while that reform didn’t pass, I think it really informed the country on how the ACA worked, and many of the policy battles we’ve seen since then have kind of echoed some lessons of that, including this fall with the government shutdown.
Political scientists have not always believed that lobbyists have a major impact on policies that are made. But when I look at healthcare finance policy in particular, I think that this is an issue where lobbyists are particularly influential in their ability to stop cost containment policies from being put into effect.
Now that the country is seemingly having a cost of living or affordability crisis, it’s getting more attention. And I think the influence of lobbyists is more important to understand now than ever.
In your book, your research shows that, at the state level, each individual healthcare lobbyist adds about $7 to healthcare costs. How did you come to that number, and what does that mean for healthcare costs as a whole?
The data from the book look at changes in each state’s per capita expenditures on healthcare. So how much do the people living in each state pay for healthcare? And what we see is that when more healthcare industry lobbyists are in each state, year over year, there tends to be less healthcare legislation that’s introduced, and the costs tend to rise more.
I see that as a function of the fact that many efforts at regulating the healthcare industry are going to make things more affordable for patients and consumers. And when legislators or bureaucrats are putting less effort into regulating their healthcare market, costs tend to inflate higher, and that’s why we see each individual lobbyist associated with higher spending in each state.
So then how does health lobbying shape what reforms are even viable for state legislatures to take on?
The major way lobbying affects the policies that are considered is that lobbyists can almost dictate what legislators will work on. And what I mean by that is healthcare is a very complicated subject to understand and to legislate. The best way to understand the healthcare field is to talk to healthcare professionals.
So, when legislators are relying on the healthcare industry for information, it gives the industry lobbyists leverage and the ability to broker what information will be given to lawmakers to make them more comfortable and able to legislate on an issue.
Moving to the federal level, are there any examples in Congress right now that show how lobbyists have been effective in shaping healthcare policy?
The $50 billion rural hospital transformation fund [included in the domestic tax bill passed earlier this year] is an acknowledgment that the future cuts that are going to come to Medicaid are going to disproportionately affect rural hospitals that rely on Medicaid reimbursements to keep the lights on.
I think that it is in some ways an indication of the effectiveness of the hospital lobby that they were able to get the Senate to acknowledge the future cuts to Medicaid were going to affect hospitals in particular. This fund was an effort by the Senate to shore up the hospitals, and it’s also an opportunity for states and hospitals to have their lobbyists continue to have an impact.
Zooming back to Vermont — because that’s where you work and do research — what can other states learn from Vermont in terms of trying to lower healthcare prices?
First of all, healthcare is not very affordable in Vermont, and I think there are kind of two lessons that can be learned from that.
I think the first lesson is you don’t want to let a hospital monopoly dominate your market the way that it does in Vermont. The University of Vermont Medical Center charges much higher prices than independent providers do around the state….Those costs really add up for the insurers and then eventually for the residents of Vermont over time.
In terms of a positive lesson for Vermont, Vermont has a regulator with the ability to approve or reject upcoming price changes year over year. It’s called the Green Mountain Care Board. In recent years, the Green Mountain Care Board has had showdowns with the University of Vermont Medical Center, which kind of shows the ability of a powerful regulator to make things slightly more affordable for residents.
Last year, the Green Mountain Care Board rejected a hospital-projected price increase. The response of the hospital was pretty disruptive, as the CEO of the hospital system actually left, and the hospital is now under new leadership. While I’m not privy to what happened on the hospital side, it’s clear that the regulator has had an impact on the business model of what the hospital is doing there.
What are some other policy ideas that you might have for healthcare cost containment?
I think the tool that legislators and bureaucrats should be eager to look for is ways to increase the supply of healthcare providers, particularly in hard-to-reach areas such as rural areas. Because in some ways, healthcare is like other parts of the marketplace. When supply is restricted, prices go up because healthcare demand does not seem to be going down anywhere….When personnel is lacking, hospitals end up paying exorbitant prices for travel nurses or having to patch things up on a short-term basis.
The other thing I think that legislators should be thinking about is how to address prices directly. Wholesale administrative price controls have been attempted before in the country. Preventing the emergence of vertical or horizontal monopolies is another way to protect patients. If healthcare is going to be provided in the open market, at least give patients a chance.
Victoria Knight is a freelance reporter in Washington, DC.
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