Congress Can End Corrupt PBM Kickbacks as A Step to True Healthcare Reform

It’s past time for Congress to undo the damage it created back in the 80’s when it exempted hospital group purchasing organizations from anti-kickback rules intended to curb Medicare fraud and abuse. Hospitals claimed this exemption would lower their costs but in reality it created a loophole that ended up increasing costs for patients and lowering quality.  TownHall.com recently published an expose of the scam: “The Multi-Billion Dollar Solution: Repeal Safe Harbor”:

History is rife with examples of government applying band-aid on top of band-aid to fix problems that arise from earlier legislative failures. The problem is, each fix tends to create a new problem or even exacerbate existing problems.

It’s time to rip this particular band-aid right off.

The roots of this particular saga can be traced back to the passage of Medicare and Medicaid.  With patients no longer in charge of the health care dollar — and a third party managing most of of bills — schemes were hatched to bilk Uncle Sam and taxpayers for  medical costs that were either unneeded or not-provided at all.  Congress passed a number of rules to stop kickbacks that helped facilitate fraud and abuse.  Usually the fix came with unintended consequences precipitating even more rules and regulations.

Ending the GPO kickback scheme is a great start. But lasting and meaningful change will also require a hard look at the underlying disease behind higher costs and lower quality. To quote The CATO Institute,”As for socialist economics, it has always resulted in shortages, inefficiency, poverty, and desperation.”

The simple truth is this: Government intervention disrupts the free market forces that weed out bad actors while rewarding entrepreneurs who give customers the best products at the lowest possible cost.

Making high-quality care available to the greatest number of patients requires putting this truth into practice. There are thousands of middlemen who make literal fortunes from the broken status quo and will fight to keep this from happening.

The good news is that they are outnumbered by the hundreds of millions of patients who will benefit from a return to sound free market principles. Making sure Americans understand this truth is a challenging task, but one at which we must succeed.

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