[00:00] Bryan Hyde: Welcome to the Health Policy Podcast. I'm Brian Hyde, and today I'm joined by Chris Jacobs, founder and CEO of Juniper Research Group. Chris, welcome to the program. Take a moment here to tell us just a little bit about who you are and what you do. [00:12] Chris Jacobs: Sure. Thanks for having me, Brian. I'm an independent policy analyst and consultant. I've spent many years on Capitol Hill. I still live on Capitol Hill, but I had worked in Congress and worked in various think tanks doing policy analysis. And so I do writing and research and policy analysis, Primarily in healthcare, but not exclusively. [00:34] Bryan Hyde: And today we have you here to talk about how hospitals make healthcare unaffordable. And as I say that, I'm picturing heads nodding in thoughtful appreciation. Yes, now that you mention it. Let's go ahead and set the stage for us. I mean, anybody who has been to a hospital or has dealt with hospitals lately understands it is one of the biggest expenses we can possibly face. But let's, let's start with why. Why has it become such a crushing you know, financial blow if someone has to be hospitalized? Sure. [01:06] Chris Jacobs: Over the past years, 10, 20 years, really, healthcare has become much more corporatized. And so you have these regional oligopolies, for lack of a better word. Hospitals buy up physicians. Insurers are buying up physician groups. Everybody's trying to buy everybody else up. so that they can get more market clout and really be able to dictate the prices. And the people who are getting lost in all of that are people like you and me, the ordinary consumer that ends up having to pay an arm and a leg or ends up with all these ruthless tactics that we've seen hospitals and other entities engage in over the years when it comes to debt collection and those sorts of things. [01:51] Bryan Hyde: So I know that, you know, a lot of people are like, well, where do we put the blame? But let's, let's talk about how apparently this is something that is agreed upon by people on, you know, from both sides of the political aisle. They agree that, yes, it's a problem. But when it comes to how it got that way, there may be some disagreement. Is there a common ground as to where, you know, the hospitals became, you know, such a monopoly that the pricing has become what it is? [02:23] Chris Jacobs: It's taken a long period of time. Obviously, changes like this don't happen overnight. I think there's a surprising amount of consensus among both the left and the right. Now, full disclosure, I consider myself more conservative-leaning, that Obamacare actually helped accelerate this in a couple of key respects. The first was the movement for accountable care organizations, and that's basically just a fancy term for networks of doctors and hospitals that are supposed to coordinate care, and that prompted doctors hospitals really to try to buy up physician practices. There's been a period of time in the '90s, hospitals and insurers tried doing that. It didn't work. They kind of went away from that model. But since Obamacare, they've done more of that. The other element in this that both the left and the right agree about is the impact of the medical loss ratio. And that's a wonky term, but it basically means that insurers can only spend 20% of their premium dollars, the premium dollars that they receive on things like administrative overhead and profit. But insurers found out that, well, if we buy a pharmaceutical benefit manager, or if we buy hospitals, or if we buy physician groups, those other business lines are not subject to the 20% restriction on administrative overhead and profit. So you're seeing a lot of shell games from companies shifting from their insurance business, shifting money away to their PBM, their pharmaceutical line of business, their physician side of business, because then they can take as high a percentage of profits as they want. And Elizabeth Warren and others on the left, I testified before Congress at a hearing in December, Families USA, they're a left-of-center group, they all, they both agreed that the medical loss ratio provision is a problem and that it's encouraging this kind of consolidation. They didn't mention that, by the way, it was Democrats that created this in 2010 as part of the quote unquote Affordable Care Act. And that's, that's, that's what's leading to this problem. So there's agreement on a lot of the causes of the problem, although they don't necessarily want to say it publicly. [04:56] Bryan Hyde: And of course, we want to talk about solutions. Let's get to that in a moment. I, I'm curious, with the midterm elections coming up, is the cost of healthcare likely to play, you know, a role in this fall's midterms? [05:10] Chris Jacobs: Absolutely. It's going to play a role. And we've seen articles really throughout. There was a Pew study that came out just a couple of weeks ago. The survey was taken in late April that showed that healthcare affordability was the top issue for voters. There's gonna be a lot, a fair bit of partisan back and forth along this because of the expiration, excuse me, of the enhanced Obamacare, the enhanced exchange subsidies that ended effective December 31st that were not renewed for 2026 this coming year. And certainly Democrats are going to try to blame a lot of the concerns about affordability and concerns about healthcare either to the expiration of those enhanced subsidies or to the various provisions in the budget bill, the big beautiful bill, whatever you want to call it, that Congress passed last year as those provisions start to take effect later this fall and into next year. [06:16] Bryan Hyde: So talk to me about some of the solutions that were put forth. Maybe we can start with the Families USA study. I know that you had mentioned— I was looking at this on your, on your website— there were actually some places where you said, you know, they, they might actually be making some sense here. [06:32] Chris Jacobs: Yeah, there was a surprising amount of agreement between conservative and liberal. And I floated that there was Families USA, which was a left-of-center group, and then Paragon Health Institute, which is a right-of-center group, put out competing policy papers in the past few weeks, and they agreed in a lot of, of the potential solutions. site-neutral payments, that you shouldn't get paid more, that a hospital shouldn't get paid more if something is like an office visit is classified as being a hospital outpatient clinic visit as opposed to a physician visit. And because what happens right now is hospitals buy a physician practice up, and by just buying the physician practice up, it's the same doctor in the same office with the same personnel. All of a sudden, you end up with a bill for 2 or 3 times the amount because of, of the way the fee schedules work. It's absurd. And but it's— it gives hospitals a great economic incentive to buy these physician practices because they can charge more and the doctors get paid more. It's something that, that makes absolutely no sense. And both left and right agree on ways to do it. The problem is, unfortunately, The hospital sector gets lobbyists and has interested parties to try to thwart these kinds of reforms. [08:02] Bryan Hyde: No, I've actually heard it said, and I don't see any reason to disagree, that among the most effective lobbying organizations in any of the states, healthcare is going to be one of the ones that leads out. And I presume that's because they have the financial clout to make things happen. [08:19] Chris Jacobs: It is. And it's because healthcare, unfortunately— fortunately and unfortunately, is one-fifth of the economy. And so when you talk about the biggest employer in most congressional districts, by and large, it's the hospital or the health system. You don't see many cases anymore where it's, you know, a huge GM plant or even Walmart, or it's the hospital system that's the largest employer. So unfortunately, people treat healthcare as a permanent jobs program because it always goes up in terms of the percentage of employment. in healthcare. And just year after year after year through the Great Recession, it keeps going up, up, up, up, up. Well, healthcare is not designed to be a jobs program. It's designed to provide care and hopefully provide care. Well, that's— again, that's absurd in the sense of you paying people to dig ditches and fill them back in. That would create jobs, but it's not efficient. So really, we need to make the healthcare system more efficient by enacting these kinds of reforms like site-neutral payment. And we shouldn't have these special interest lobbyists basically worrying about their profits or the jobs that might get impacted by it. [09:36] Bryan Hyde: Chris, talk to me about nonprofit hospitals and specifically how strengthening oversight of nonprofit hospitals might also lend a solution to this. [09:47] Chris Jacobs: Yeah, there's really a lot of transparency that needs to go in because in many cases, and there have been various studies, in many— some of the studies have suggested that nonprofit hospitals actually provide less charity care than for-profit hospitals. Well, that's— well, then why are you getting a tax break on things like federal taxes or state and local property taxes, those sorts of things? Why are you getting a tax break if you're actually providing less charity care than the for-profit hospital down the street. So there isn't a lot of transparency regarding specifically how the hospitals define community benefit. And that's a nebulous term. It sounds great, but it can mean a lot of different things. There were some reforms that were put in, I think actually as part of Obamacare in 2009, 2010, to the disclosure forms that the hospitals have to provide. But frankly, they should be doing more. about that, and it should be more transparent, and it should be less arbitrary that hospitals can just define community benefit in the way that best suits them politically to do that. [10:57] Bryan Hyde: I mean, I don't want to sound suspicious-minded here, but what you've just described, at least on the part of some of these nonprofit hospitals, is that, that, that tax status is more of a shield against taxes than an encouragement to to take care of the communities in which they're operating. [11:14] Chris Jacobs: Well, absolutely. And the other thing is, a lot of these quote unquote nonprofit hospitals are part of huge chains, that there are hundreds of nonprofit hospitals. This isn't like the nuns back in the day that, you know, I'm Catholic, that established a hospital and they would treat and you'd have, you know, the Mother Teresa types or whatever treating patients and It's, it's not like that. It's very corporatized. Their leaders get paid hundreds of thousands, if not millions of dollars per year. And people oftentimes— it's changing, but people would think, oh, it's just these kindly little charities. This is a big business. This is absolutely a big business. And we've got to treat it like a big business and not this, this myth that it's just a bunch of, of Kindly old nuns sitting around, you know, ministering to people in their hour of need. [12:10] Bryan Hyde: What about curbing the monopolistic behavior? Because it seems like healthcare and government have become increasingly indistinguishable in certain areas. And this is, you know, again, something's taken place over, you know, a long period of time. But is there a way to encourage separation of medicine and state? [12:33] Chris Jacobs: Yeah. Now, of course, one of the problems is the government pays for most of healthcare through Medicare, Medicaid, the Obamacare tax credits, even employers. There's a big tax break for employer-provided health coverage that you don't pay income or payroll taxes on that. That's— so the government is inherently involved. I think certainly we should have had some of these mergers that for the past 10, 15 years that they've been buying up physician practices and hospitals and consolidating, we should have had more government action at the time. I don't know necessarily whether you can unwind all of these things, but certainly more antitrust enforcement would, would go— would help the process. And then I think the other process is to empower the patients. to actually have the patients being the one making the decisions about the care instead of some HR executive at a corporate headquarters who may or may not have interests aligned with the actual workers and the workers' families. [13:38] Bryan Hyde: So what is the biggest contributor to the kind of anti-competitive behavior that we see on the part of some of these large healthcare concerns? [13:48] Chris Jacobs: I think it's the fact that they are all large and then they are all non-transparent. The way that hospitals and insurance companies have fought tooth and nail for years and years and years not to make prices available. I mean, it's absurd. And I've written stories about this that I've gotten estimates from, from hospitals and facilities. And it's not just hospitals, certainly it's all healthcare providers. They don't want to tell you what things cost. that you can find out in advance. And then there was an instance several years ago where I went for, for an MRI and they said, here's what the price was in advance. And then they sent me a bill for, for more than that. I said, well, why? And, and I, I spent weeks kind of pestering them with emails and saying, I'm a writer, I'm writing about this. What— they finally just forgave the difference, but they never gave me an explanation. They just kind of did that to shut me up. And how many people give up on fighting bills like this because they just don't think it's worth the time, don't think it's worth the effort? I had this issue that I literally was going to take a provider to court for overcharging. And then at the very last minute, they said, okay, we'll forgive the thing. It was our error. They didn't tell— they spent— they spent a year. They were going to send me to collections, have, you know, my credit ruined, and I just kept fighting the thing. Now, the amount they forgave was less than what I ended up spending in terms of the value of my time and energy to do this sort of thing. And that's, that's the problem. If you knew what the prices were to begin with, you would at least be able to make an educated, informed decision about where to spend your money and how and where and how to spend your money or not spend your money. That's what we need to do. [15:49] Bryan Hyde: Chris, one final question for you, and this is, this is kind of a hard one for people who are on the free market side of things. You know, I'm, I'm kind of, you know, typecasting here, but conservatives generally are going to be supportive of the free market, but they'll also be accused of, oh, you know, you're not, you're not putting people first. What are some ways that conservatives can put forward positive ideas about healthcare? And, and maybe if you have any examples of what some of those ideas might look like. [16:15] Chris Jacobs: Yeah, sure. And I think it's true. And folks on the left say, oh, the free market doesn't work. To my previous point, we've never had a market in health care because you can't find out what anything costs. I mean, I'm a conservative in the sense of I don't believe in big government solutions. I don't like a lot of regulation. I'm willing to live with transparency mandates on things because healthcare won't act like every other industry will and just tell you what the heck something costs. And so that's one solution that would be helpful. I think also empowering patients and empowering, empowering patients with the money, as President Trump talked about when he, when he put out his healthcare plan, give people the money and let them make their own choices. Some people will make good choices. Some people will not make good choices. But frankly, having millions of empowered people make their own decisions will force the hand of hospitals and insurance companies where right now the providers, they only have to negotiate with a handful of people, a handful of insurance executives or a handful of HR people at the largest employers that employ most of the people with health insurance. If you actually had to go out and talk and listen to your customers and listen to your patients, we might actually get some, some real reforms and some real efficiency in the system. [17:48] Bryan Hyde: And, and one final question here for you, Chris. Where can people find your website? [17:53] Chris Jacobs: Sure, I'm at juniperresearchgroup.com. That's all one, Juniper Research Group. You can catch me on Twitter @ChrisJacobsHC, and I also write, uh, frequently for The Federalist and The Wall Street Journal. [18:06] Bryan Hyde: Chris Jacobs is our guest. He's the founder and CEO of Juniper Research Group. Chris, thank you for joining us on the Health Policy Podcast. [18:12] Chris Jacobs: Thanks so much for having me.