00:00Thank you very much, Senator Sanders. Thank you so much for having this hearing and thank
00:04you all for being here. Senator Cassidy, thanks for helping put this together as well.
00:09This is an issue that I've worked on for almost two decades. I led Connecticut's first effort
00:15to put in place pro-consumer debt collection practices when I was a state legislator, the
00:21chair of the Public Health Committee, and I'm excited to have introduced a bipartisan
00:25piece of legislation with Senator Braun, the Strengthening Consumer Protections and Medical
00:29Debt Transparency Act that would make a number of incremental but important reforms to the
00:34current system. One of the things we've seen in Connecticut, for instance, is that sunlight
00:39often shames providers who have extraordinarily high rates of, for instance, referring claims
00:49to debt collection agencies well outside of the state mean into better practices. When
00:54we undertook our state reform effort, Yale-New Haven was an outlier in the state, being much
01:01more aggressive than other hospitals in collecting debt. Today, they are frankly one of the most
01:05consumer-friendly hospitals, in part because of sunlight. Danbury Hospital was at the top
01:11of the list, and then an effort to show that Danbury's practices were well outside of the
01:15mean helped them bring them back into line as well. So that works in Connecticut, but
01:21it works in Connecticut largely because we have not-for-profit healthcare hospitals that
01:28have a community board, have a responsibility to the community. Increasingly, though, hospitals
01:33and healthcare practices are owned by private equity firms, are owned by shadowy, unaccountable
01:40financial organizations whose only interest is in driving profit, in driving return for
01:47investors, and have no connection to the on-the-ground practices that impact consumers. Dr. Meslich,
01:54I think you talked about this in your book, the impact that the extraordinary increase
02:00in private equity ownership of doctors' practices and hospitals have on debt collection. I want
02:05to ask one additional question, so give me a minute on what you found.
02:10Thank you, Senator, and thank you for your leadership on this issue. You really have
02:13been at the forefront. A lot of us, three-quarters of us now, physicians work for large corporate
02:19entities, and that includes non-profits, but as well private equity companies, insurance
02:25companies, and it takes a tremendous toll on patients. There is not that connection
02:30to the patient, as you said. There is not that history of a relationship to the community,
02:35and as a result, a lot of the most recent cases of a very aggressive debt collection
02:40filling up courtrooms, oftentimes in the American South, are taken by private equity
02:45companies, and so those are the entities that really have taken the lead in aggressive pursuit
02:50of low-income patients.
02:52Again, these are ownership companies that are only interested in a return on investment.
02:59Now, it's extraordinary that we have allowed that to become the norm in our health care
03:03system. We aren't too far from an era in which we thought health care was so important, kind
03:09of like elementary schools, that there should be some connection to the common good, and
03:14now that is vanishing.
03:15Dr. Esselstyn, I wanted to ask you about medical credit cards, which is an extraordinary new
03:22phenomenon driven in part by the financialization of our health care system. Hospitals are adopting
03:29these cards. In one North Carolina hospital, they went from 9 percent of their patients
03:35paying interest on their bills to 46 percent of their patients paying interest on bills
03:40because the hospital brought in a credit card company, and instead of just putting patients
03:43on installment plans, they now sent them to a credit card company. These credit card companies
03:49are charging extraordinary interest rates, are often overhyping the benefits of the card.
03:56Do you see this as a problem for your patients?
03:59I think it's a huge problem, and to your point, you could imagine a world where the same private
04:03equity firm owns the credit card and owns the hospital that provides the care, right?
04:08And you think about conflicts of interest, and it's profound. The other side of this
04:12is that we talked about some of the benefits of, or some of the unique aspects of medical
04:17debt and the ways that policy has sought to pull them out of the traditional consumer
04:22monitoring. When you talk about credit card debt, which is what you're doing, is transferring
04:27debt owed to a hospital or a clinician to a credit card with super high APR, now you
04:33start to appreciate the fact that they don't benefit from a lot of that. And so this is
04:37an extremely pernicious new way of trying to further financialize the cost of getting
04:43exorbitantly high-priced healthcare in this country.
04:46Finally, quickly, Dr. Chino, I saw you nodding your head. It seemed in skepticism of transparency,
04:52price transparency is the only means to solve this problem. I share that skepticism, so
04:57just a few seconds on why you were nodding your head.
04:59Yes, we've done some fair amount of research on price transparency, and we found that price
05:04transparency is, number one, not adhered to. Our evaluation of NCI-designated cancer centers
05:10found that less than a quarter were adherent. But of the prices that were posted, they were
05:14huge variations. So for a single service, one hospital was charging $300. Another one
05:20was charging $30,000 for the same service. These are all at NCI-designated cancer centers.
05:26So when you think about that level of variability, that is the free market. That is, you know,
05:32you get as high a price as you can get, and that is not the way to run healthcare to maximize
05:37profit.
05:38Great. Thank you. Thank you, Mr. Chair.
