NCPA supports OCPA claims that health care competition does work

Jonathan Small, C.P.A. and president of the Oklahoma Council of Public Affairs (OCPA), recently wrote a “Free Market Friday” op-ed for The Journal Record to promote freedom in the delivery and payment of health care, showing how Oklahoma is better off not accepting funds to support the Affordable Care Act (ACA).

“Oklahoma lawmakers have generally leaned toward free market-oriented cost-saving efforts in health care,” Small wrote. “Oklahoma lawmakers should be wary of a recent attempt by select lawmakers to inappropriately interfere in the contracting of health care delivery. House Bill 2799 attempted to inappropriately interfere in the contract negotiations between a health plan and pharmacists by allowing pharmacists to break an agreed-to contract with the health plan and its pharmacy benefit manager.”

Health care scholars are also looking at Small’s argument and agreeing with his findings.
“What Jonathan Small is referring to are the steps to make it easier for patients to navigate the health care system,” Devon Herrick, health economist and senior fellow at the National Center for Policy Analysis (NCPA), recently told American Pharmacy News, “and a way to encourage more competition among providers in the system as it currently exists.”
Small argued that embracing competition and avoiding more mandates is saving taxpayers a considerable amount of money. “Oklahoma has become known for a number of efforts recently to implement policy with the intention of promoting freedom in the delivery and payment of health care,” Small wrote. “Oklahoma lawmakers also rejected the failed state-based exchanges as provided in the Affordable Care Act, saving Oklahoma taxpayers hundreds of millions of dollars.”
Herrick explained Oklahoma’s method for health insurance and how it is able to offer competitive prices.
“Oklahoma is home to some highly competitive providers, not far from the state capitol, who offer cash prices and full price transparency,” he said. “These providers have aggressively courted area employers and let members of the legislature know. This has forced more of the other providers to bundle prices and offer better deals to avoid losing business.”
Herrick further explained that part of what Oklahoma has done is to allow competition and mostly avoid protecting entrenched interests as some other states have done. Unfortunately, the ACA has a harder time competing with such trends seen in Oklahoma.
“The ACA does not really have any cost-control mechanisms,” he said. “The biggest obstacle is the fact that the ACA attempts to create cross-subsidies where some are expected to overpay so other patients can get a better deal. It’s hard to compete on price under those conditions.”
Herrick said he found Small’s argument of free-market health care compelling. “Competition is a better way to control medical prices than regulations like certificate of need or other regulatory hurdles,” he said.