A Bipartisan, Consensus Approach to Health Care Reform

Recommendations to Congress and the Administration

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Introduction

America’s Agenda and its member organizations are committed to a common mission: achieving guaranteed access to affordable, high quality health care for every American.

Yet expansion of quality health care to millions of uninsured and underinsured Americans is not sustainable while health costs rise at rates that undermine living standards of working families, undercut employer profits, and put American businesses at a competitive disadvantage in the global economy. A study by the Henry J. Kaiser Family Foundation finds that premiums for employer-sponsored health insurance in the United States have been rising four times faster, on average, than workers’ earnings since year 2000. Over roughly the same period, employer contributions to family health insurance plans have more than doubled.

Too often, labor and employer relations have been marred by conflict over cost shifting as the health cost burden grows. In recent years, relentless inflation in health costs has created a shared interest among U.S. businesses and labor in reducing the overall rate of growth in health costs, which is severely jeopardizing the wellbeing of each. This historic realignment of business and labor interest in reforming a highly inflationary health care system creates an unprecedented opportunity to transform a fragmented and inefficient U.S. healthcare delivery system into a coordinated system that can drive down the rate of cost growth while enhancing the quality of care. These objectives are becoming the glue that is uniting stakeholders who were adversaries in past reform efforts behind a common approach to health cost containment.

The emerging consensus over reform of America’s health care delivery system has consolidated around a common understanding of three major drivers of health costs:

  1. There is epidemic growth of chronic disease in the U.S. population. At least 75% of overall health spending is associated with treatment of chronic disease. In Medicare, 95 cents of each health care dollar is spent on treatment of chronic disease. The number of Americans with costly chronic diseases such as heart disease, diabetes, and hypertension is rising sharply. There is a significant acceleration in prevalence of chronic conditions among juveniles.

  2. More Americans are receiving more expensive care, but outcome measures show that more expensive care isn’t necessarily better care. In fact, a Rand Corporation study shows that chronically ill patients receive only 56% of clinically-recommended services.

  3. In large part, the administration of U.S. health care is inefficient and costly, draining valuable dollars away from provision of quality care.

Over the past 15 years, private employers, health care providers, and state governments have acquired substantial experience in managing rapidly rising health costs. Although the scale of private enterprises, health providers, state, and local governments is too small to neutralize systemic drivers of health costs over time, private sector and state government experience in managing the impact of major cost drivers is instructive for the design and enactment of effective federal legislation.

The federal reform policies outlined in this section represent a growing consensus about how the major cost drivers can be countered through enactment of health reforms that will prevent and effectively manage chronic disease, develop evidence-based strategies for continuous quality improvement,align incentives for health system actors to adopt healthy and cost-saving behaviors, and harness health information technology to reduce administrative inefficiency and enhance coordination and quality of care.

Recommendations to Congress and the Administration

Download PDF

Introduction

America’s Agenda and its member organizations are committed to a common mission: achieving guaranteed access to affordable, high quality health care for every American.

Yet expansion of quality health care to millions of uninsured and underinsured Americans is not sustainable while health costs rise at rates that undermine living standards of working families, undercut employer profits, and put American businesses at a competitive disadvantage in the global economy. A study by the Henry J. Kaiser Family Foundation finds that premiums for employer-sponsored health insurance in the United States have been rising four times faster, on average, than workers’ earnings since year 2000. Over roughly the same period, employer contributions to family health insurance plans have more than doubled.

Too often, labor and employer relations have been marred by conflict over cost shifting as the health cost burden grows. In recent years, relentless inflation in health costs has created a shared interest among U.S. businesses and labor in reducing the overall rate of growth in health costs, which is severely jeopardizing the wellbeing of each. This historic realignment of business and labor interest in reforming a highly inflationary health care system creates an unprecedented opportunity to transform a fragmented and inefficient U.S. healthcare delivery system into a coordinated system that can drive down the rate of cost growth while enhancing the quality of care. These objectives are becoming the glue that is uniting stakeholders who were adversaries in past reform efforts behind a common approach to health cost containment.

The emerging consensus over reform of America’s health care delivery system has consolidated around a common understanding of three major drivers of health costs:

  1. There is epidemic growth of chronic disease in the U.S. population. At least 75% of overall health spending is associated with treatment of chronic disease. In Medicare, 95 cents of each health care dollar is spent on treatment of chronic disease. The number of Americans with costly chronic diseases such as heart disease, diabetes, and hypertension is rising sharply. There is a significant acceleration in prevalence of chronic conditions among juveniles.

  2. More Americans are receiving more expensive care, but outcome measures show that more expensive care isn’t necessarily better care. In fact, a Rand Corporation study shows that chronically ill patients receive only 56% of clinically-recommended services.

  3. In large part, the administration of U.S. health care is inefficient and costly, draining valuable dollars away from provision of quality care.

Over the past 15 years, private employers, health care providers, and state governments have acquired substantial experience in managing rapidly rising health costs. Although the scale of private enterprises, health providers, state, and local governments is too small to neutralize systemic drivers of health costs over time, private sector and state government experience in managing the impact of major cost drivers is instructive for the design and enactment of effective federal legislation.

The federal reform policies outlined in this section represent a growing consensus about how the major cost drivers can be countered through enactment of health reforms that will prevent and effectively manage chronic disease, develop evidence-based strategies for continuous quality improvement,align incentives for health system actors to adopt healthy and cost-saving behaviors, and harness health information technology to reduce administrative inefficiency and enhance coordination and quality of care.

Contents

Consensus on Reform

 

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