From soaring medical debt to abrupt hospital closures, consumer advocates see a healthcare sector in need of oversight

Hospitals have less price transparency and are more likely to drop certain types of lower-margin care, critics say, compared to when they were treated similar to utilities.

It seems unfathomable that an electric utility would simply shut down and leave a community in the dark. Or a phone provider. Or a water company. And until recently, many in Wisconsin’s Chippewa Valley would have said the same thing about seeing not one but two local hospitals abruptly announce total closures. But it did happen and consumer advocates and some elected officials want to see more oversight on behalf of patients, employees, and local economies.

While stopping short of calling for an outright return of the old Wisconsin Hospital Rate Setting Commission, Citizen Action of Wisconsin executive director Robert Kraig made clear in an UpNorthNews Radio appearance and a recent news conference in Eau Claire that an unrestrained corporate profit motive in the private sector requires a consumer watchdog in the public sector.

“We have the most expensive health care system in the world,” Kraig said. “It’s driving massive amounts of medical debt. And yet we don’t cover everyone. And people don’t even use their health insurance often because they’re afraid they can’t afford the copays, deductibles. It’s a huge problem.”

Kraig said there has been an understandable focus on inflation recently,  but consumers are worried about more than the price of gas or mortgage payments.

“The thing people are most fearful of—and concerned about the cost of—is health care,” Kraig said. “The solutions are right in front of us, and it has to do, quite frankly, with privatization. Our hospitals are unregulated, unlike the utilities where rate increases have to get approved by the Public Service Commission.”

Hospital rates have been a topic of policy conversations dating back to the early 1970s, when state government tried a variety of approaches that were sometimes voluntary, sometimes partnerships, and sometimes state-imposed. That changed, Kraig said, in the 1980s, a period when “Reaganomics” embraced self-regulation by businesses.

“Hospitals got themselves deregulated,” Kraig said. “They can build anything they want. This has helped drive massive costs and very dangerous closures, as predatory competition between these huge hospital monopolies undercut some players that [then] leave the market. That happened in the Chippewa Valley.”

Earlier this year, Illinois-based Hospital Sisters Health System (HSHS) shocked the community by announcing it would close Sacred Heart Hospital in Eau Claire and St. Joseph’s Hospital in Chippewa Falls, affecting more than 1,000 workers and countless patients who had to make new arrangements for surgeries, baby deliveries, check-ups, chemotherapy, drug and alcohol counseling, and many other services.

Sen. Jeff Smith, a Democrat from the Eau Claire County town of Brunswick, requested a legislative study committee to look into the closures and determine options that could help other Wisconsin communities avoid similar disruption, but majority Republicans opposed it.

In Kraig’s view, better state oversight would also address the wide fluctuations in prices for similar procedures.

“Billing is not transparent,” Kraig said. “It’s complicated, and you don’t know what the price is going to be. When you buy a car, when you buy a TV, you know the price you’re going to pay. ​​You don’t know in health care. You can’t find out. And the prices don’t make sense. They’re all over the maps. One hospital will charge four times for the same procedure as another guy’s, but the other will charge less for a different procedure. And there are all these different billers involved and so it’s deliberately opaque.” 

The conditions exist even with providers that are categorized as non-profit.

“Hospitals say they’re nonprofit, but they’re nonprofit in name only,” Kraig said. “They operate in the same way [as] Wall Street-traded companies like big insurance and big pharmaceutical companies. And if you leave them in control, they’ll charge as much as they can. They also focus on profit, what is profitable. So communities often don’t have the care they need, like primary care and mental health care, because they have a lower margin while you have all these specialty services for when people get very sick. We’d have a system that worked better if we kept more people from getting that sick in the first place.”