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Business Roundtable Report Says Overhaul Proposals Promising

By Jane Norman, CQ HealthBeat Associate Editor

November 12, 2009 -- The Business Roundtable issued a report on Thursday saying that certain changes contemplated by Congress in the health care system could result in savings, and that improvement has to come or businesses risk seeing costs continue to rise.

"A number of the proposed reforms offer real promise, not only to save federal dollars, but also to reduce the rate of increase in private-sector spending if adopted and implemented appropriately," says the report prepared by Hewitt Associates for the group, which is made up of the leaders of top U.S. companies.

"Promising ideas include proposed delivery system reforms such as value-based purchasing, innovation centers to experiment with alternative methods of provider reimbursement, accountable care organizations, payment bundling and financial penalties for avoidable hospital readmissions," the report says.

Those ideas could reduce the rate of future health care cost increases by 15 to 20 percent when fully phased in by 2019, the report says, or $3,000 per employee. "This assumes the government implements the initiatives quickly, accurately, and consistently, and that private payers follow by implementing similar measures in a disciplined and timely way," it adds.

However, no endorsement of House or Senate legislation is offered, and the report also cautions that some ingredients are missing that are needed for system-wide change.

"Most important, current reform provisions must be broadened if we hope to achieve a more "normal" market dynamic for health care costs across all stakeholders, both public and private," it says. Risks include a too-weak individual mandate for health insurance, continuation of the practice of "defensive medicine," congressional reversals of provisions that would save costs, and more.

Nonetheless, the report was met with excitement by both the White House and Senate Finance Committee Chairman Max Baucus. President Obama said in a statement that the report makes clear the most important investment the country can make when it comes to business competitiveness is a revamped health care system.

"The Business Roundtable's report comes as Congress is reaching new milestones in the effort to reform our health care system," said Obama. "The potential benefit for America's businesses is just another reason why we can't afford delay or political games as this process moves forward."

Baucus said that the report shows the need for Congress to act. U.S. businesses pay far higher health care costs per employee than their competitors around the world and the cost to the U.S. economy grows every year," he said. "Employers are standing behind health reform because they know it will mean more predictable and affordable health care costs that can boost U.S. competitiveness and create jobs at home."

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