Reform of the U.S. Health Care System

For decades, HR Policy Association member companies have sought access to affordable, high-quality health care, and they currently spend more than $80 billion annually purchasing health care products and services in the United States for employees, retirees, and their dependents. These companies have been seeking reform of the U.S. health care system to improve the quality and lower the cost of health care. They believe that the Patient Protection and Affordable Care Act broadens access to the U.S. health care system but fails to make any meaningful changes in the way health care is delivered by the health care supply chain, and then places the primary burden for paying for this broadened access on employers and the people who they cover.

In addition, many employers are concerned that passage of PPACA represents the first major step down a path that, within ten years, will result in health care no longer being provided through the employment relationship as it is today in the United States. If not struck down sooner by the courts, they see the incentives in the law pushing employers to drop coverage, coupled with law’s flawed financing mechanisms, resulting in the system created by Congress eventually collapsing. This will force policy makers to draft the next version of health care reform. In this second round, the Association will be focusing on delivery system reforms of paramount importance to the payer community to reduce the cost and improve the efficiency of the U.S. health care system. Specifically, the Association will be seeking the following:

  1. First, do no harm. More than 160 million Americans receive their health care through the employer based system. The foundation of that system is ERISA, which has enabled the employment based system that so many Americans benefit from. Policy makers must above all, maintain ERISA preemption and avoid the temptation to impose onerous new regulations on employer sponsored plans, which will only serve to increase costs and stifle innovation.
  2. Fix Medicare and Medicaid: The federal government is the largest health care purchaser. Yet it operates Medicare and Medicaid in a way that incents waste and substandard quality. First and foremost, policy makers should focus on reforming entitlement programs to encourage provider quality and efficiency, and wise use of our nation’s limited health care resources by beneficiaries. Simultaneously, aggressive actions should be taken to address the pending insolvency of Medicare.
  3. Pay for performance, not volume: The federal government must abandon the current fee-for-service payment system and use the purchasing power of Medicare and Medicaid, programs which purchase approaching 50 percent of America's health care and strongly influence the way health care in America is delivered, to pay providers based on the quality and efficiency of the care provided.
  4. Put a spotlight on quality and cost: The price and quality of health care should no longer be one of the best kept secrets in America. Purchasers and consumers of health care need federal standards that require comprehensive disclosure and public reporting of cost and quality information for health care providers, insurers, and treatments in order to enable consumers to make informed decisions for themselves and their families when choosing care and care givers.
  5. Empower the American consumer: With vastly improved public reporting and transparency, we can then restructure our health care system to make individuals more accountable for choosing the best providers and treatments, living healthy lifestyles and managing chronic conditions. Public policy also needs to enable employers to create benefit programs which incent individuals to choose the most high quality, cost effective providers and treatments. Appropriate insurance reforms must also be created to give individuals appropriate access to coverage in the private market without creating a situation that will destroy risk pools through adverse selection.
  6. Find a fix for the medical malpractice mess. The Congressional Budget Office estimates that medical malpractice reform would save $54 billion over the next ten years, a number larger than most of the tax hikes proposed in the various House and Senate health care bills.