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Archive for Sunday, June 1, 2003

Business will drive health care reform

June 1, 2003

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— The clearest dynamic to emerge from the opening stage of the battle for the Democratic presidential nomination is the rise of health care as the defining issue in the contest. This is hardly a surprise to those of us who have been out talking with voters. Few living room conversations proceed very far without the cost, the quality and the availability of health insurance coming to the fore.

What is less understood is that a similar dynamic is operating in the business world. It is this factor which is likely to prod President Bush into joining the Democratic dialogue on the best way to expand access to health care in this country.

While at least four of the Democratic hopefuls have offered major health plans, the administration is inclined to resist discussing or proposing any comprehensive health insurance reform. It prefers to take a smaller but still significant step, by adding some form of prescription drug benefit to an overhauled Medicare system. Its tax cuts have left no money in the Treasury for major expansion of health care coverage and, of course, it resists the Democrats' proposals for rolling back some or all of the Bush tax cuts to pay for programs that would bring more Americans adequate health insurance.

But a diverse group recently made the case that the cost of inaction on major health reform is much higher than any of the budgetary costs associated with a major overhaul of the system.

The National Coalition on Health Care paraded a variety of private-sector leaders -- the president of the Communications Workers union, the head the giant California public employee retirement system known as CalPERS, the president of the 35-million member AARP -- to testify that, as CalPERS' Sean Harrigan put it, "fixing our dysfunctional health care system ... needs to be our top priority,"

What was particularly striking was to hear that same view from the heads of several of America's major corporations. James Rogers, the chairman and CEO of Cinergy Corp., the energy giant, said it is "currently spending $10,000 per full-time employee on health care" and with present trends, that figure will double every five years. "This liability absorbs huge amounts of our income and capital -- dollars we could be using for other priorities."

Carlos Gutierrez, chairman and CEO of Kellogg Corp., said, "Our health care costs were up nearly 30 percent last year alone ... 10 times faster than our U.S. sales and 20 times higher than the projected increases for our raw materials and packaging."

William Daley, former secretary of commerce and now president of SBC Communications Inc., said, "The present course we are following is unsustainable. Employers can't continue to absorb double-digit increases in health care spending, year after year." Last year, his company's health care costs rose by 17 percent -- about $250 million -- while it was cutting costs elsewhere to reduce overall spending by $1.6 billion.

These firms are all members of the National Coalition on Health Care, a bipartisan organization whose honorary co-chairmen are former Presidents Jimmy Carter and Gerald Ford.

The organization has not endorsed a specific plan, but its message is clear: Unless the approach is comprehensive, it is unlikely to head off this looming catastrophe. Its principles call for universal health insurance as a first step toward controlling expenses and ending the cost-shifting that burdens policyholders and their employers for the uncompensated costs of those who show up at hospitals and emergency rooms without insurance.

A comprehensive reform would also aim at improved quality, by emphasizing preventive medicine and carefully measuring the value of various treatments, and would simplify the overly complex system of financing and administration we know today.

Is such a system feasible? The answer, all these hard-headed businessmen say, is yes. It is not only possible but necessary. Otherwise, according to the coalition's best estimates, the average annual premium for employer-sponsored family health coverage may reach $14,545 in 2006, more than double the average premium in 2001, and the number of uninsured Americans will grow by 10 million to more than 51 million.

That's why this is much more than a Democratic nomination-fight issue.

Correction: In a column for release May 14, I wrote that at one point in his career, Karl Rove was working on a doctoral thesis on the emergence of the Republican South. He was teaching a seminar at the LBJ School of the University of Texas and writing on the subject, but it was not a doctoral thesis.




-- David Broder is a columnist for Washington Post Writers Group.

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