Book Club — Pre-Existing Conditions: How Lobbying Makes American Health Care More Expensive

If you’re still looking for a summer read, Pre-Existing Conditions, by Alex Garlick, is a good choice. This is the first deep dive I’ve found into the impact of state-based lobbying on healthcare costs. Most descriptions of healthcare policy, including the influence of lobbying, only looks at the federal level. Most important health policy happens at the state level. States regulate insurers, including rate approvals, license and regulate providers, run Medicaid programs (usually the largest coverage source in states), and state employee plans (often the largest employer plan in states). Access to policymakers is easier, and in most states every bill gets a public hearing where anyone can testify. State policymakers have far fewer resources and staff to parse the claims of health industry representatives. Even the best resourced states are flying blind.

It’s a lot harder to research across 50 state legislatures and administrations over time than to just study Congress, but this author did the work. He searched through mountains of data across all 50 states on legislative proposals, votes and what passed, political environments, economic data, and interviewed dozens of stakeholders. He makes a deep dive into three cases in great detail.

• The 2011-2012 Massachusetts Cost Containment Bill — that didn’t work to control costs and why
• Scope of Practice in Wisconsin – how a bill is defeated
• State Drug Pricing Reform – overcoming the odds and taking what you can get

The top lines are that states with more health industry lobbyists have higher healthcare inflation. When health industry lobbying increases by one standard deviation, state per person health costs rise by $263/year. Democratic control of government leads to more state cost control proposals and lower costs.

Industries have several advantages over advocates and policymakers who want to control healthcare costs. Industries often predict that jobs and/or critical health services will be lost if their costs are constrained. Lobbyists have lots more money and armies of staff to out-maneuver advocates and others who work to control costs. Lobbyists, as they often have data and information on how the system works (or doesn’t) that they won’t share. It’s hard to fix something you can’t see. Industries only have to kill cost containment bills to keep the money coming, and negative lobbying is far easier than affirmatively passing something. They have the time to build relationships with legislators they can call on when needed. The list goes on.

It’s a miracle we can pass anything. And even what we do pass, often doesn’t work because states don’t control private industries and don’t have all  the information.

The author then ventures into policy recommendations for states to contain healthcare costs. I don’t agree with some, others we’ve tried and they didn’t work, and he missed some I would propose. But it’s an important perspective for anyone who cares about making healthcare more affordable. At least we know what we’re up against.