Gephardt and Thompson: Steep Costs Damage Families, Businesses
As veterans of many political battles, we both learned long ago that far-reaching legislation like health care reform requires House and Senate Members to strike consensus. Today, we share optimism about the possibilities for health care reform this year, stemming from the emerging consensus around how to improve quality and lower costs so that we may increase access to affordable health care for all Americans.
Summit conversations across the country with business, labor, health care and government leaders have helped stakeholders take steps toward consensus: We believe the growth in reducing health care costs for businesses and families and improving quality of care are essential building blocks of reform. Reducing the relentless growth in health costs is essential to ensure all Americans have access to affordable, quality health care. These costs are a growing burden for struggling families and an obstacle for the nation’s long-term economic recovery, and they are undermining the ability of American businesses to compete abroad and create new jobs here at home.
A recent study by the Henry J. Kaiser Family Foundation found that premiums for employer-sponsored health insurance in the United States have been rising four times faster, on average, than workers’ earnings since 2000.
America’s Big Three automakers — vital to the economy of our home states of Missouri and Wisconsin, and many others — have been especially devastated by out-of-control health care costs for their workers and retirees. At least in part, the impact of those costs is being played out in real time as Chrysler and General Motors struggle to remake themselves.
The epidemic growth of chronic diseases in the United States accounts for 75 percent of our overall health care spending. In fact, 95 cents of every Medicare dollar is spent for treatment of chronic disease. Coupled with alarming growth in the incidence of diabetes, cardiopulmonary disease and other obesity-related diseases among children, America is on an unsustainable path.
Fortunately, we have the ability to improve our overall health and trim hundreds of millions of dollars from our nation’s annual health care costs in two major ways. First, a robust investment in prevention of chronic disease. We currently spend less than 1 percent of our health care dollar on prevention when, according to the World Health Organization, at least 80 percent of all heart disease, stroke and Type 2 diabetes and up to 40 percent of cancer could be prevented if people ate healthier, exercised and stopped using tobacco. Our system has to focus more on preventing disease before it starts by expanding educational campaigns on healthy lifestyle and giving incentives to schools, businesses and community organizations that initiate diet and exercise programs.
Second, we must change the incentives for both patients and providers.
Currently, the way we pay for health care encourages volume of services rather than quality. A RAND Corp. study found that only 56 percent of the care chronically ill patients typically receive is appropriate. Put conversely, 44 percent of our national chronic disease spending is wasted. By aligning incentives, we can respect values of choice and personal responsibility, yet encourage patients and health care providers to adopt best health care practices based on sound scientific evidence.
America’s Agenda — an alliance bringing together an array of national and international labor unions, U.S. businesses and government leaders — will announce Tuesday its support for a set of federal health care reform policy recommendations focused on substantially reducing the growth of health care costs for businesses and families, while enhancing quality of care. This set of reform policy recommendations is based on the common ground we’ve found at summit conversations held around the country and tested in states such as Vermont and West Virginia, where enactment of similar reforms have won broad support across the political spectrum.
As progress toward federal health care reform continues to build momentum, we hope these observations will spur discussion on these key components of an effective reform plan. The most successful path to ensure all Americans have access to affordable care lies in designing a more cost-efficient health care system, built on American strengths, like encouragement of innovation, that have served us so well. A Congressional consensus that respects the finest aspects of our current health care system, yet lays the foundation for allowing affordable access for all Americans by fixing the formidable challenges of cost and quality, will earn the gratitude of millions of families and businesses across the country.
Dick Gephardt is a former House Democratic leader and is president and CEO of the Gephardt Group. Tommy Thompson is a former governor of Wisconsin and former secretary of the Department of Health and Human Services. He is a partner at the law firm Akin Gump Strauss Hauer & Feld.