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Leavitt Calls on Businesses to Take Part in Health Transparency Plan

By Cheyenne Hopkins, CQ Staff

November 17, 2006 -- Department of Health and Human Services (HHS) Secretary Michael O. Leavitt on Friday acknowledged tension between employers and physicians over a recent plan for health transparency but said the health care industry is responding.

At a National Summit on Health Care Transparency held by the Business Roundtable, an association of chief executive officers, Leavitt said HHS has started to focus on 200 employers and hopes to have more than 60 percent of the marketplace include "four cornerstones" that build on a recent presidential executive order as part of their purchasing criteria.

The executive order, issued by President Bush on Aug. 22, requires providers and plans doing business with federal health programs to publicize data on the cost and quality of their care and to organize billing and insurance claims in a way that allows the cost and quality of medical procedures to be compared easily.

The order also requires that providers and plans doing business with federal health programs meet "interoperability standards" when they acquire health information technology systems to ensure that those systems work well with each other. Leavitt said the plan provides cornerstones to build a health care system.

The order covers those doing business with Medicare, the Defense Department, the Department of Veterans Affairs, and the Federal Employees Health Benefit Program. Combined enrollment in those health coverage programs adds up to about one-quarter of all Americans with health coverage. Medicaid is exempted from the executive order.

On Friday, the American Benefits Council, the National Retail Federation, and the Leapfrog Group expressed support for the plan. The Leapfrog Group issued a release urging employers to sign a letter in support of the executive order. Jerry Carter, senior vice president of human resources for the International Paper Company, said a number of companies already have signed such a letter.

Leavitt said the effort for health transparency was greatly accelerated Friday with the Business Roundtable summit. The secretary said he hopes to have "scores of the largest companies committed" to using the plan as part of their purchasing criteria by the end of the year. So far, 30 health care systems have been certified for the plan, Leavitt said.

He also proposed forming business–health care collaborations into a network for standardization of cost measurement and creation of health transparency systems, adding that HHS intends to provide a charter for collaborations to have access to Medicaid and Medicare data to harmonize these matters.

Leavitt said changing the health care sector has proven a difficult task and the only method for change is one based on consumer value. He said the federal government, rather than the private sector, must lead health care change or it would be almost impossible to reach critical mass.

However, he acknowledged tension between employers wanting to get health transparency soon and physicians wanting to make sure such a system is accurate. Leavitt said because both business and health care providers have a vested interest, they can be motivated to provide a transparency system.

Much of the audience applauded Leavitt's plan. But some in the audience expressed concerns. One questioned whether the plan would create incentives for healthy behavior. Leavitt said the executive order would be a building block to spur other health care incentives, including ones for healthy behavior. He also proposed moving toward a system of prevention rather than treatment to lower health care costs.

Another audience member representing Westpoint Insurance Group Ltd. in Chicago said Leavitt did not address potential tension from patients, whom he said would be reluctant to switch doctors, even for a measurement standard.

Leavitt responded that the plan would lead to increased health knowledge for consumers through Web sites popping up with doctor information and employers integrating health transparency into their plan.

Health care represents 16 percent of the gross domestic product, Leavitt said. While he said he would not be so bold as to say the plan would result in a large drop in health care costs, he did predict a trend to a "moderate" decrease. Leavitt said the executive order would create competition based on value not on brand.

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