Chairman Rockefeller's Remarks on Competition in the Health Care Marketplace

July 16, 2009

Today’s hearing takes place as part of a broader effort to transform health care in this country. 
If we are serious about providing every American with access to affordable, meaningful health care coverage, we absolutely must start by confronting its soaring costs.
The average American family today pays twice as much for its health care as it did a decade ago.  And health care costs are one of the top reasons for otherwise financially-sound families falling into bankruptcy. Families in West Virginia and all across the nation are suffering and that is absolutely unacceptable to me.
I have heard stories from countless constituents forced into impossible circumstances by rising prices: the family from Fairmont, West Virginia whose nine-year old son has leukemia and needs a bone marrow transplant. But they have reached their insurance policy’s $1 million cap.  As local teachers, they make a modest salary – too much to qualify for public assistance but too little to afford the procedure they need to save their child’s life.  Heartbreaking.
Many factors contribute to those rising prices and push quality health care farther beyond the reach of more Americans everyday. But it goes beyond simple market forces:
A big reason behind rising health care costs is the coercive practices that manipulate the market, mask true cost, and burden health care consumers with even greater risk while others reap the profits.
Last month the full Commerce Committee convened a hearing where we learned some alarming facts about just how common and costly that manipulation can be. 
While the insurance industry promises to base their out-of-network payments on what they call the “usual, customary, and reasonable” cost of medical care in a particular area – it is clear that for a decade or more, many of the largest insurers have colluded to fix those prices, skew their rates downward, and significantly short–change patients and providers.
I am very proud of the Committee’s investigation into these manipulative practices and pledge we will continue working to ensure the industry is held accountable for any deceptive practices that may have cost consumers in higher prices and reduced access to necessary medical care.
By continuing to pursue and eliminate market manipulation, we can bring more competition into the system and bring costs down.  This is one part of my unrelenting motivation to make health insurance market reforms a fundamental piece of any comprehensive health care reform.
The FTC, which has already taken significant action, needs to be more aggressive with doctors, hospitals, pharmaceutical manufacturers and medical suppliers who manipulate the market. The commission also needs the resources and the tools to maintain this downward pressure.  
The Justice Department, which has been far too lax over the last eight years, must re-engage in policing anticompetitive practices by insurance companies: taking action against one bad actor in an industry can serve as a potent deterrent to others in that industry to refrain from the same behavior — a multiplier effect of increased enforcement.
For too long, too many health care decisions have been made behind closed doors with industry profits – not the patient’s best interests – in mind. It is no surprise that without any transparency or the force of competition to keep them honest, industry profits soared, as have consumer costs and the barriers to necessary medical care.
I want to welcome our witnesses and thank them for their work to protect the American public. I look forward to your testimony. And a special thanks to Subcommittee Chairman Pryor for presiding today and for his tireless leadership on behalf of the American consumer.