WASHINGTON – A new report by the Business Roundtable indicates key components of healthcare reform could slow the growth of healthcare costs.
The report, released Thursday, said "the right reforms" could slow healthcare growth from its current 10 percent a year to 4 percent, on pace with the Gross Domestic Product.
The report shows that effective reforms could slow healthcare costs by as much as $3,000 per employee in 2019.
According to Antonio Perez, chairman of Business Roundtable's Consumer Health and Retirement Initiative and chairman and CEO of the Eastman Kodak Company, "Healthcare reform done right could reduce the growth rate of healthcare costs – not just for government, but for the private sector as well. This must be a key measurement of success for Business Roundtable and the economy as a whole and will be a key factor of businesses' review of the final healthcare legislation."
"The report also shows that reform done wrong won't work and could make a bad situation much worse, in which case Business Roundtable could not support the bill," Perez added.
"The crippling spike in healthcare costs makes it harder for America's companies and workers to compete in the world economy. In this challenging economic environment, we need to make sure we improve, not erode, U.S. competitiveness," said Ivan Seidenberg, chairman of the Business Roundtable and chairman and CEO of Verizon Communications. "We can do that by implementing the broad-based delivery system reforms approved by the Senate Finance Committee and avoiding ill-advised proposals such as the public option."
According to the Business Roundtable, employers provide 60 percent of all healthcare coverage in the United States, with Business Roundtable's member companies providing health coverage to more than 35 million Americans.
According to the report, healthcare reforms that would help curb costs include:
- Delivery system reforms, such as value-based purchasing;
- Innovation centers that identify alternative methods of provider reimbursement;
- Accountable care organizations that realign financial incentives to improve the quality and the value of the care delivered;
- Financial penalties for failing to avoid preventable hospital re-admissions;
- Increased individual accountability for healthcare spending decisions, including health reimbursement arrangements and health savings accounts;
- Cost and quality of care data that is easier for patients and providers to access and use;
- Elimination of sharp regional variations in practice patterns;
- Promotion of wellness and prevention programs and expanding financial incentives to participate in specific programs to reduce lifestyle related illness; and
- Insurance market reforms that promote competition and choice.
The report notes that a number of potential changes threaten to increase healthcare spending. Some of those include:
- Delayed or watered-down cost-saving efforts;
- Failure to implement a strong individual mandate to minimize cost increases in the health insurance exchange plans;
- Increases in the cost of healthcare to individuals from changes to consumer spending accounts or other actions that discourage consumer-engaged decision making; and
- Cost-shifting to the private sector from reductions in federal reimbursements to providers and from a public plan option, if included.
President Barack Obama said the report underscores what experts and businesspeople have been saying all along – that comprehensive health insurance reform is an important investment.
"The Roundtable's report also makes clear the steep price that American businesses stand to pay if we fail to act," Obama said. "If we don't pass comprehensive reform, the report finds, healthcare costs that are already squeezing our businesses will continue to rise, and in 10 years, employment-based spending on healthcare for large employers will be fully 166 percent higher per employee than it is today. And the yearly health insurance costs for the average employee will rise to a staggering $28,530."
"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," Obama said. "I look forward to working with our business communities and their partners in Congress to pass reform by the end of the year."
Photo by ragesoss obtained via Creative Commons license.
