HELENA — Alarmed by rising health care costs, a Montana legislator is seeking to impose price controls on hospitals and place them under the authority of the state's public service commission.
Democratic Rep. Tom Woods of Bozeman asserted Wednesday before the House Human Services Committee that Montana Hospitals have a virtual monopoly in many communities. He wants the PSC to review any increases in pricing.
As expected, hospitals pushed back against the bill.
Montana Hospital Association Vice President Bob Olsen pointedly denied that hospitals were "ripping off consumers." He said Montana hospital prices rank among the lowest in the country.
Woods is seeking to fix hospital prices according to reimbursements set by the federal Medicare program. Nonprofit hospitals could charge 138 percent of the Medicare reimbursement rate for medical procedures and other services. For-profits hospitals would be allowed to charge 150 percent. Any price increases would need approval from the PSC, which usually regulates energy companies and other public utilities in Montana.
"We need to treat hospitals like the monopolies they are," Woods told the legislative panel. That monopoly, he said, is partly responsible for rising health care costs.
"I hope we will all agree that there is a need to address this problem," he said. "The solution that this bill offers has a great deal of promise."
Public Service Commissioner Roger Koopman said the bill would cause "financial and logistical nightmares."
"The prospect of transforming the PSC into a two-headed bureaucracy with two distinctly different missions is mind-boggling," Koopman said.
But Woods said the lack of competition in some Montana communities has meant higher costs. "There is no price transparency, and there is no competition when it comes to hospital care," he said.
"I think it's time to recognize that because hospitals are behaving like monopolies, we need to control them like monopolies," Wood said.
Hospital prices can vary dramatically from state to state, sometimes from hospital to hospital in the same geographic reasons, according to the Centers for Medicare and Medicaid Services.