WASHINGTON—U.S. Senator Chris Murphy (D-Conn.) on Thursday spoke at a U.S. Senate Health, Education, Labor, and Pensions Committee hearing on the growing medical debt crisis. In his questions to Dr. Luke Messac, Attending Physician at Brigham and Women’s Hospital and Instructor of Emergency Medicine at Harvard Medical School, and Dr. Abdul El-Sayed, Director and Health Officer at Wayne County Department of Health, Human & Veterans Services, Murphy emphasized the importance of fighting for consumer protections as the financialization of healthcare drives up costs for American consumers.

“This is an issue I have worked on for almost two decades,” said Murphy. “I led Connecticut's first effort to put in place pro-consumer debt collection practices when I was a state legislator, the Chair to the Public Health Committee, and I’m excited to have introduced a bipartisan piece of legislation with Senator Braun, the Strengthening Consumer Protections and Medical Debt Transparency Act, that would make a number of incremental, but important, reforms to the system.”

Murphy highlighted successful efforts in Connecticut to reform medical debt collection practices: “One of the things we’ve seen in Connecticut, for instance, is that sunlight often shames providers who have extraordinarily high rates of, for instance, referring claims to debt collection agencies well outside of the state mean, into better practices. When we undertook our state reform effort, Yale New Haven was an outlier in the state, being much more aggressive than other hospitals in collecting debt. Today, they are frankly one of the most consumer-friendly hospitals, in part because of sunlight. Danbury was at the top of the list, and then in an effort to show that Danbury’s practices were well outside of the mean, we helped bring them back into line as well.”

He continued, underscoring how private equity’s growing involvement in health care is driving up prices and reducing quality for patients: “So that works in Connecticut, but it works in Connecticut largely because we have not-for-profit health care hospitals that have a community board, have a responsibility to the community. Increasingly, though, hospitals and health care practices are owned by private equity firms— are owned by shadowy, unaccountable financial organizations whose only interest is in driving profit, in driving return for investors, and have no connection to the on-the-ground practices that impact consumers. These are ownership companies that are only interested in a return on investment. That’s extraordinary, that we have allowed that to become the norm in our health care system. We aren't too far from an era in which we thought health care was so important, kind of like elementary schools, that there should be some connection to the common good. Now that is vanishing.”

Murphy also highlighted the role of credit card companies in further exacerbating the medical debt crisis: “Hospitals are adopting these cards—in one North Carolina hospital, they went from 9% of their patients paying interest on their bills to 46% of their patients paying interest on bills because the hospital brought in a credit card company. Instead of just putting patients on installment plans, they now send them to a credit card company. These credit card companies are charging extraordinary interest rates and are often overhyping the benefits of the card.”

Last year, Murphy introduced bipartisan legislation to strengthen consumer protections and improve transparency for medical debt practices.

A full transcript of his remarks can be found below:

MURPHY: “Thank you very much, Senator Sanders, thank you for having this hearing. Thank you all for being here. Senator Cassidy, thanks for helping put this together as well. This is an issue I have worked on for almost two decades. I led Connecticut's first effort to put in place pro-consumer debt collection practices when I was a state legislator, the Chair to the Public Health Committee, and I’m excited to have introduced a bipartisan piece of legislation with Senator Braun, the Strengthening Consumer Protections and Medical Debt Transparency Act, that would make a number of incremental, but important, reforms to the current system.

“One of the things we’ve seen in Connecticut, for instance, is that Sunlight often shames providers who have extraordinarily high rates of, for instance, referring claims to debt collection agencies well outside of the state mean, into better practices. When we undertook our state reform effort, Yale New Haven was an outlier in the state, being much more aggressive than other hospitals in collecting debt. Today they are frankly one of the most consumer-friendly hospitals, in part because of Sunlight. Danbury was at the top of the list, and then in an effort to show that Danbury’s practices were well outside of the mean, helped bring them back into line as well.

“So that works in Connecticut, but it works in Connecticut largely because we have not-for-profit health care hospitals that have a community board, have a responsibility to the community. Increasingly, though, hospitals and private equity firms are owned by private equity firms— are owned by shadowy, unaccountable financial organizations whose only interest is in driving profit, in driving return for investors, and have no connection to the on-the-ground practices that impact consumers.”

“Dr. Messac, I think you talked about this in your book, the impact that the extraordinary increase in private equity ownership of doctors, practices and hospitals have on debt collection. I want to ask one additional question, so give me a minute on what you found.”

MESSAC: “Thank you, Senator, and thank you for your leadership on this issue. You really have been at the forefront. A lot of us, three quarters of us now, physicians work for large corporate entities, and that includes nonprofits but also private equity companies, insurance companies. And it takes a tremendous toll on patients. There is not that connection to the patient as you said, there is not that history of relationship to the community. And as a result, a lot of the more recent cases of very aggressive debt collection, filling up courtrooms, oftentimes in the American South, are taken by private equity companies. And so those are the entities that really have taken the lead in aggressive pursuit of low-income patients.”

MURPHY: “Again, these are ownership companies that are only interested in a return on investment. That’s extraordinary, that we have allowed that to become the norm in our health care system. We aren't too far from an era in which we thought health care was so important, kind of like elementary schools, that there should be some connection to the common good. Now that is vanishing.

“Dr. El-Sayed, I want to ask you about medical credit cards, which is an extraordinary new phenomenon driven in part by the financialization of our health care system. Hospitals are adopting these cards—in one North Carolina hospital, they went from 9% of their patients paying interest on their bills to 46% of their patients paying interest on bills because the hospital brought in a credit card company. Instead of just putting patients on installment plans, they now send them to a credit card company. These credit card companies are charging extraordinary interest rates, are often overhyping the benefits of the card, do you see this as a problem for your patients?”

DR. EL-SAYED: “I think it's a huge problem, and, to your point, you can imagine a world where the same private equity firm owns the credit card and owns the hospital that provides the care. Right? And, you think about conflicts of interest, and it’s profound. The other side of this is that we talked about some of the benefits of, or some of the unique aspects of, medical debt, and the ways that policy has sought to pull them out of the traditional consumer monitoring. When you talk about credit card debt, which is what you’re doing, [and how it] is transferring debt owed to a hospital or a clinician to a credit card with super high APR, now you start to appreciate the fact that they don't benefit from a lot of that. And so, this is an extremely pernicious new way of trying to further financialize the cost of getting exorbitantly high-priced healthcare in this country.”

MURPHY: “Finally, quickly, Dr. Chino, I saw you nodding your head, it seemed, in skepticism of price transparency as the only means to solve this problem. I share that skepticism. So just a few seconds on why you’re nodding your head.”

DR. CHINO: “Yeah, so we’ve done a fair amount of research on price transparency, and we’ve found that price transparency is, number one, not adhered to. Our evaluation of NCI designated cancer centers found that less than a quarter were adherent. But of the prices that were posted, there were huge variations. So, for a single service, one hospital was charging $300. Another one was charging $30,000 for the same service. These are all NCI designated cancer centers. So, when you think about that level of variability, that is the free market. That is, you know, you get as high a price as you can get, and that is not the way to run health care, to maximize profit.”

MURPHY: “Thank you. Thank you Mr. Chair.”

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