K. Ignagni, Uniquely American Solution, Modern Healthcare and The Commonwealth Fund, April 2009.
Commentary on The Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey on Priorities for the Obama Administration by Karen Ignagni, CEO of America's Health Insurance Plans
Significant consensus has emerged that health care reform, which has eluded our nation for almost a century, should be enacted this year, and that bold changes are necessary to ensure high-quality, affordable health care for all Americans.
The health plan community recognizes that providing health security begins with market reforms and has offered comprehensive recommendations to ensure that all Americans are covered. Our community also recognizes that successful reform will require a comprehensive cost-containment strategy.
Across the country, health plans have implemented disease-management and care-coordination programs; are paying for high-quality performance; have pioneered medical homes with measurable objectives; and have developed innovative assessment tools to minimize costly duplicative testing. These strategies have helped take annual premium increases from 13.9 percent five years ago down to 4.8 percent last year, but more needs to be done to reduce increases in the price of health services. This will require an even bigger change: collaboration and leadership among all of the stakeholders across the healthcare system to address the underlying cost curve.
There are areas of strong agreement. There is compelling evidence that changing payment incentives will improve quality and reduce costs. Bringing patients in early for preventive care and screening reduces future catastrophic outlays. Improving public health and investing in an anti-obesity campaign, much like successful anti-smoking campaigns, can work to improve the health of the nation and reduce related costs. Coordinating care for those with chronic illnesses has a major impact on quality of life, quality of care, and costs. Providing scholarships and loan forgiveness for physicians specializing in primary care will help with the human resources necessary to fulfill these objectives.
But according to the the Centers for Medicare and Medicaid Services (CMS), over the next 10 years, health expenditures will increase approximately 6.7 percent per year, causing health care to consume 20.3 percent of the gross domestic product. On the other hand, if each stakeholder group were to lead an effort to identify ways to take 1.5 percentage points off growth, we would achieve aggregate savings of approximately $3 trillion over 10 years.
Without a doubt this is an ambitious plan contingent upon leadership. But the alternative is that Congress will begin to examine arbitrary strategies similar to the Balanced Budget Act of 1997 to bend the cost curve or adopt a Medicare-like payment structure that will systematically underpay providers. All of us can do better. Health plans have put forth major market reforms.
Our community shortly will advance administrative simplification proposals that can reduce costs in hospitals and in doctors' offices, reduce paperwork across the system, and make the process of getting health care simpler for patients. We are working with leaders in the hospital industry as they seek to bend the curve in their sector, and we are confident that their proposals will be equally effective. Now is the time for all sectors to step forward and identify potential savings throughout the system.
Our board of directors has suggested that Congress set an overall goal for reductions in the future rate of growth and that a commission be formed to create a road map for reducing costs. Other structures could make sense as well. Acting now to identify small reductions across all sectors will provide significant relief to individuals and businesses purchasing coverage, improve the solvency of the Medicare trust fund, and free up resources to finance reform, including coverage for all Americans. Cost, quality, and access are interrelated, and therefore our approach must aim to improve them all. The alternative is a familiar path of temporary actions that create unintended consequences, get repealed and exacerbate the problem, ultimately making it difficult to enact reform.
In moving to pass legislation this year, Congress can create a uniquely American solution by encouraging and expecting uniquely American stakeholder responsibility.
The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.