Congress not placing enough emphasis on controlling health care costs

Most people agree that reform of our nation’s health care system is needed. Not everyone is covered by health insurance or covered well, exposing them to financial catastrophe if their health goes awry.

Quality of health care varies from region to region, and from provider to provider. And costs are staggering. A recent study showed health insurance premiums in New Hampshire have increased more than 90 percent from 2000 to 2008. By comparison, wages rose just 21 percent over the same period.

Ask any business person in New Hampshire to name the top challenges, and he or she will tell you that at or very near the top of the list is paying for the rising cost of health care and health insurance for their employees.

This has been a constant refrain for years from our members across the state, from every industry type, and from every size enterprise – small businesses, midsize companies and large employers.

It’s remarkable, therefore, that health care reform under consideration by our congressional delegation in our nation’s capital seems very likely to add to health care costs, not reduce them. What happened to “bending the cost curve” and eventually lowering it?

Pick your source – the Congressional Budge Office, the Lewin Group, the Centers for Medicare & Medicaid Services and others – and they conclude that health care reform legislation under consideration by both chambers of Congress will, incredibly, increase costs, not lower them.

Lots of attention is being paid to expanding government programs like Medicaid, or creating new ones like a “public option” insurance plan, to cover more uninsured and underinsured individuals.

Unfortunately, the federal government’s long track record of grossly underfunding health care providers for their cost of caring for individuals in existing government programs like Medicaid and Medicare makes many employers understandably concerned about expanding them or creating new ones.

More underfunding from the federal government means more cost-shifting to the business community in the form of higher health insurance premiums. How is this reform?

Too little attention is being paid to moving these massive federal programs away from the current fee-for-service payment structure, which often rewards health care providers for providing more care, but not necessarily better care, because they get paid more.

Not enough attention is being paid to rewarding providers for lower utilization and improved health outcomes for patients. Too little attention is being paid to reforming our legal system so doctors move away from practicing defensive medicine in order to lessen the odds of being sued.

Until the great health care reform debate shifts emphasis away from its current focus on expanding government health care programs or creating new ones, and toward reforming payment incentives, there will be no bending of the cost curve.

And that curve will continue to rise and employers will find it increasingly difficult to provide a critical benefit for their employees and compete in the global economy.

Jim Roche is president of the New Hampshire Business & Industry Association.