How Business Can Save America From Health Care

One of America’s most enduring mysteries is why the organizations that pay for most health care don’t work together to force better value from the health careindustry.We pay double for health care what our competitors in other developed nations do, but studies show that more than half of our annual health care spend – equal to 9% of GDP or our 2012 budget deficit – provides zero value. Every health care sector has devised mechanisms that allow it to extract much more money than it is legitimately entitled to. Health plans contract for and pass through the costs of products and services at high multiples of what any volume-based purchaser can buy them for in the market. Medical societies campaign for excessive medical service values that Medicare and commercial payers base their payments on. Hospitals routinely over-treat and have egregious unit pricing. There are scores of examples.Decades of these behaviors have made health care cost growth the most serious threat to America’s national economic security. Medicare and Medicaid cost growth remains the primary driver of federal budget deficits. Over the past decade, 79% of the growth in household income has been absorbed by health care. Health care’s relentless demand for an ever-increasing percentage of total resources compromises other critical economic needs, like education and infrastructure replenishment.Health care costs have been particularly corrosive to business competitiveness. Three-fourths of CFOs now report that health care cost is their most serious business concern. Commercial health plan premiums have grown almost five times overall inflation over the past 14 years. Businesses in international markets must overcome a 9+ percent health care cost disadvantage, just to be on a level playing field with their competitors in Australia, Korea or Germany.The health care industry’s efforts to maximize revenues have been strengthened by its lobby, which spins health policy to favor its interests. In 2009, as the Affordable Care Act was formulated, health care organizations fielded eight lobbyists for every Congressional representative, providing an unprecedented $1.2 billion in campaign contributions to Congress in exchange for influence over the shape of the law. These activities go on continuously behind the scenes and ensure that nearly every health care law and rule is structured to the industry’s advantage and at the expense of the common interest.Health care is now America’s largest and most influential industry, consuming almost one dollar in five. Only one group is more powerful, and that’s everyone else. Only if America’s non-health care business community mobilizes on this problem, becoming a counterweight to the health care industry’s influence over markets and policy, can we bring health care back to rights.

In every community, employers represent loose groupings of lives covered by health benefits, each with different approaches and results on health outcomes and cost. There are few standards and divergent opinions – mostly based on ideology rather than evidence – on plan structure, service offerings, cost sharing, incentives and many other variables.

Business health coalitions represent the opportunity for health care purchasers to collaborate and become more consistent. They can move collectively toward best practice and market-based leverage, with better health outcomes at lower cost. Coalitions like those in Savannah, Ga.  and Madison, Wisc., have shown impressive, measurable impacts. Many others could benefit from shared access to advanced risk management capabilities that can change how benefits and health care work.

Another critical missing component has been the direct involvement of business leaders. Many senior executives may not fully appreciate health care’s often blatant inappropriateness, and possibly haven’t thought through the scale of financial impact on their own businesses and the larger economy.

It will take businesses collaborating, harnessing their immense purchasing power, to disrupt health care’s institutionalized mechanisms of excess. By leveraging their collective strength, purchasers can convey that health care profiteering will no longer be tolerated, and that America’s economic success is dependent on the right care at much fairer pricing.

These goals are worth pursuing for our employees and their families, our businesses and the country. And we call on America’s employers to join us.

Brian Klepper, PhD, is chief executive officer, National Business Coalition on Health, a non-profit membership organization of purchaser-led business and health coalitions, representing over 7,000 employers and 35 million employees and their dependents across the United States.

This post originally appeared in Employee Benefit News where Dr. Klepper is a regular contributor.


3 replies »

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  2. “Mana kak long ni mama?Suami Mak Leha telah meninggl dunia tiga tahun lalu kerana jangkitan penyakit misteri. Walaupun ketika disekolah dulu dialah wanita paling pemalu apabila digosipkan dengan mane-mane lelaki. Waktu outing dan pulang bermalam pun ditetapkan oleh pensyarah. memang menawan. rindu. bisiknya.”, Ayah belum batalkan tiket? ayah?

  3. Isn’t it obvious that Big Insurance has taken over the people’s Medicare/Medicare purse as well as the private sector insurance for all of our citizens?
    No wonder that we pay so much for so little because patients are managed as “product” for profit by Big Insurance. Have you looked at Executive Compensation as reported recently by Wendel Potter in the Center for Public Integrity. These obscene profits in the form of compensation for these CEOs cannot be justified —-especially when the people’s Medicare/Medicaid purse is being raided to produce these profits. Imagine! the stock market invests in Medicaid providers?
    We need to get Big Insurance out of the people’s Medicare Purse and treat health care as a human right and a civil right of citizens in democratic
    Republics. Most democratic republics already have “single pay” systems but
    the “for profit” system is so entrenched in the United States and the elderly/retired on Medicare/Medicaid are so brainwashed that they think they are getting MORE from these private insurance companies than from original Medicare.
    Unilateral covert and overt(DNR) Code Status is being extrapolated into the charts of the elderly/disabled on Medicare/Medicaid when the hospitals KNOW lhat existing CMS and private insurance reimbursement protocols will NOT reimburse the hospital for any further care.
    Isn’t this shameful abd why is this not revealed to the public?