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Health Care Reform Is Not a Spectator Sport

June 2009 is no ordinary month in the decades-long pursuit of meaningful national health care reform. Both the U.S. House of Representatives and Senate are working feverishly to mark up reform bills that, if successfully reconciled and enacted into law, will rewrite the fundamentals of U.S. health care; everything from who gets care, to what services are provided, to how it’s paid for will (potentially) change. The stakes for employers are very high.

Many employers may already know that the Obama administration and congressional leaders have made a very public commitment to build on the existing employer-based insurance system. But that’s not the end of the story. The reforms being discussed on Capitol Hill will affect employers. To understand how, let’s look briefly at what’s on the table.

IMPORTED: __media_988E80F06C774654BDA5433A907FC560_w_300_h_210_as_1.jpg Coverage for all. Almost everyone agrees that reform won’t accomplish its goals of better health and lower costs unless all Americans have health insurance. That’s good news for the nation’s 48 million uninsured, but it’s also great for employers, who can look forward to a healthier, more mobile workforce once reform is enacted. It will also mean that the cost of uncompensated care will be lifted from the shoulders of employers.

A new market for health insurance. Likewise, most Democrats and Republicans agree on the need for a “health insurance exchange,” through which individuals and small employers could compare plans and shop for coverage. Details on how this might work are still spare, but preexisting condition exclusions would certainly disappear and individuals would be able to carry coverage from job to job. Federal employees enjoy just this type of marketplace already under the highly regarded Federal Employees Health Benefits Program.

A coverage mandate. In order to make the health insurance market work, most Democrats and Republicans have agreed on the principle of “shared responsibility”—everybody gets coverage, everybody pays, and everybody wins. In practice, shared responsibility means a mandate of some sort: individuals must obtain coverage, while employers must offer it or participate in the health insurance exchange. The President recently said such mandates might be waived or modified for low-income people and small employers.

Taxes. If you thought spending cuts and savings gleaned from eliminating waste and improving quality might be enough to pay for all of these changes, think again. Most estimates of the cost of the reform proposals now on the table put a $1.2 to $1.6 trillion federal budget price tag (over 10 years) on the effort. To pay for it, President Obama has included $634 billion in his proposed budget for next year. But more money will be needed. Some in Congress are now exploring limiting the tax exclusion on health benefits provided through employers, particularly for high-priced policies. The potential revenues are enormous: even if Congress decides to levy a tax only on plans in the top quarter of the price range, it would raise upwards of $330 billion by 2019.

A public plan. Is the hour at hand when doors to a public plan will be opened to everyone? Maybe, but establishing a public health plan to compete with private insurers remains extremely contentious. Some argue that it would help cut costs and increase access; others are concerned that a public plan would lead to cost shifting to the private sector and an uneven playing field. One recently proposed alternative to a government-sponsored public plan option is the establishment of state or regional nonprofit health cooperatives that would compete with private insurers. This idea is beginning to collect some support on both sides of the aisle, and co-ops of various kinds do have a proven track record in the market—hundreds already exist.

It is still too early to predict how health care reform debates will play out, but that makes it a good time to revisit the five things we need most out of whatever health care system is to come:

  • Improved Access – All Americans need and deserve health care coverage. A system that leaves 48 million Americans without coverage, ranks last among a survey of 19 developed countries in terms of mortality amenable to medical care, and spends twice per capita what other major countries spend is unacceptable. No American should be forced to put off needed care or decline a promising new job offer or enter into bankruptcy for want of health coverage. The problem of the uninsured impoverishes us all and constitutes a national disgrace. 
  • Real Cost Control – We need to end the overuse, underuse, and misuse of health care that by some estimates eats up 33 cents of every health care dollar.1 We need better health information technology to support doctors in their decision making. We need objective comparative effectiveness research to help establish guidelines to reduce wild variations in care patterns and ensure that every patient gets the right care at the right time and in the right setting.
  • Payment Reform – Across every health care setting, we need to start paying for value and stop paying for volume. We can no longer afford counterproductive payment practices that make us less healthy and cost us more money by rewarding mistakes. Medicare is already leading the way in this regard with its new practice of not paying for preventable mistakes or infections. The rest of the health care system must follow suit. 
  • Accountability – Standardized measurement and public reporting across the health care system is a moral imperative and a precondition of building feedback loops that will help doctors, clinics, hospitals, and health plans improve as they move forward. Employers and consumers must be empowered to make informed health care decisions based on quality and value. 
  • A Focus on Prevention and Wellness – We need to develop an infrastructure that makes it possible to diagnose and treat populations before they get sick, when treatment is cheapest and most effective. And as part of this effort, we need to build a culture that rewards living well and staying healthy.

One thing that is very clear at this point is that what happens on Capitol Hill will not be the last word in health care reform. Legislation can only provide a framework for the health care system of tomorrow; what happens in your community is still up to local actors.  

So it's important to find out what is at stake in national health care reform. One way to do that is to join your local business coalition on health and read whatever policy material they have available. Or visit or to find contact information for your representatives in Congress.

As an employer, you should also take the time to consider whether you’re making the most of your current benefits program. Are you steering people toward needed care or quality providers? Do you encourage health providers to invest in health IT? Do you have a position on covering the uninsured?

Finally, and above all else, participate in the debate—the health of the nation depends on it.

1 Peter Orszag, Congressional Testimony to the Senate Finance Committee, delivered September 2008.


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