Saturday, November 14, 2009

CEOs examine pros and cons of healthcare reform

health care reform

A recent report by the Business Roundtable , an association of chief executive officers of leading U.S. companies, indicates that key aspects of healthcare reform could slow the growth of healthcare costs, providing savings to companies and employees. However, the report also points out proposed reforms which would increase costs.

The report has been widely touted by Democrats who say the report shows their efforts will lower costs.

The report "underscores what experts and businesspeople have told us all along--comprehensive health insurance reform is one of the most important investments we can make in American competitiveness," said President Barack Obama in a statement.

According to the report, the right reforms could result in health care costs growing at the same rate as overall GDP – about 4 percent per year, a rate much lower than the current 10 percent per year growth rate

“This report shows that effective reforms can slow health care costs by as much as $3,000 per employee in 2019,” said Antonio M. Perez, Chair of Business Roundtable’s Consumer Health and Retirement Initiative and Chairman and CEO of Eastman Kodak Company. “Health care reform done right could reduce the growth rate of health care costs – not just for government, but for the private sector as well.”

According to the report, Heathcare reforms that would help cut 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 health care 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;

• Promote wellness and prevention programs and expand financial incentives to participate in specific programs to reduce lifestyle related illness; and

• Insurance market reforms that promote competition and choice.

On the other hand, the report also notes several potential reforms which could increase costs, such as:

• 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 health care 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.