Letter: Price controls could pound the final nail in the coffin for rural Minnesota health care

Hospitals and health systems are essential to the communities they serve. But in Minnesota and throughout America, rural healthcare systems are struggling. The pandemic, a tight labor market, and underpayment by Medicare and Medicaid have hindered rural healthcare systems.

Now, the Minnesota Legislature is aiming to impose yet another unreasonable hurdle for rural healthcare systems to overcome and could impair rural healthcare providers’ ability to provide adequate care for patients.

Legislation currently working its way through the Minnesota Legislature would establish what is being called a “Prescription Drug Affordability Board.”

The proposed PDAB would be an unelected, unaccountable group of government bureaucrats setting price controls for Minnesota healthcare providers. All voting members of the PDAB would be political appointees of the governor, not elected by the people of Minnesota.

If price controls are imposed on medicines, many rural doctors will be put in the untenable position of deciding whether to prescribe their preferred, more effective treatment at a financial loss or to administer an outdated, less effective treatment that fits within the price-controlled market. Thus, the proposed PDAB could bring with it a shortage of treatment choices for patients and doctors and a limited incentive for medical innovators to create new treatments and cures.

Already, Medicare and Medicaid reimburse less than the cost of providing services , with rural hospitals incurring $5.8 billion in Medicare underpayments and $1.2 billion in Medicaid underpayments in 2020. This is in addition to $4.6 billion in uncompensated care provided by rural hospitals.

Because rural hospitals are more likely to serve a population that relies on Medicare and Medicaid, they are not able to offset low public program payment rates with revenues from other patients. In the commercial insurance market, rural hospitals are often forced to accept below-average rates or are left out of plan networks altogether.

Disparities in access to care and health outcomes for underserved, rural, and minority populations have long been a significant issue. Any policy that could further restrict the availability of care to these populations – or forces them to travel further – needs to take the issue of health equity into consideration.

If the proposed PDAB were to put additional constraints on healthcare providers’ ability to recoup the cost of doing business, many providers might leave Minnesota, which would exacerbate issues around accessing treatments and cures.

An unintended consequence of the PDAB could be a new, unwanted “health tourism” industry frequented by Minnesotans. If, for example, northeast Minnesotans can’t access healthcare in Duluth, would they start going to Wisconsin for it? If western Minnesotans can’t access healthcare near their home, would they start going to the Dakotas for it? Rural healthcare systems are already struggling to serve their communities, and the proposed PDAB might put patients farther and farther from adequate care, let alone from the superior care that Minnesotans have come to enjoy and expect.

The consequences of establishing this board could be disastrous for Minnesotans. Government bureaucrats should not stand between doctors and patients or between patients and their medicines.

Minnesotans should contact their legislators today and tell them to oppose price controls for rural healthcare systems and to oppose the establishment of a PDAB in our state.

Kent Kaiser is the secretary/treasurer of the St. Paul-based Domestic Policy Caucus. More information about the organization’s “Patients Not Bureaucrats” initiative can be found at  www.patientsnotbureaucrats.org .

This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.