Hardly A Surprise: Health Care Reform Good For Business, Bad For Insurance Companies

A report from the Business Roundtable finds that health care reform will be good for business. They support much of what is in the health care reform bills but disagree on some points . They do not support the public option and they want to go further than the current legislation does to attempt to have the government control health care decisions. The Wall Street Journal reports:

The Business Roundtable, which represents the chief executives of major U.S. companies, released a report that stated that without changes to the current U.S. health-care system, costs would rise to $28,530 per employee. But the “right legislative reforms” would reduce those costs by more than $3,000 per employee, according to the report…

President Barack Obama in a statement said the report “underscores what experts and businesspeople have told us all along–comprehensive health insurance reform is one of the most important investments we can make in American competitiveness.”

A statement from Senate Finance Chairman Max Baucus (D, Mont.) states that the report “adds to the evidence that the bottom line is on the line for businesses in health reform.”

The report points to a number of possible changes included in some form in House and Senate health-care bills to make health spending based more on quality than quantity and improve prevention and wellness efforts. One example is payment “bundling” to doctors and hospitals, which would provide a single payment for all services related to a treatment or condition.

Another bright spot cited by the report is a section in legislation approved by the Senate Finance Committee that would design a system of “value-based” payments from Medicare to doctors and hospitals. The proposed system would base some payment rates on quality measures.

Ivan Seidenberg, chairman of the Business Roundtable and chairman and chief executive of Verizon Communications Inc., in a statement cited a need to “make sure we improve, not erode, U.S. competitiveness.”

“We can do that by implementing the broad-based delivery system reforms approved by the Senate Finance Committee and avoiding ill-advised proposals such as the public option,” Mr. Seidenberg said.

But the report states that the current bills “are missing some ingredients” to permanently draw down future growth in health costs. The report commends the bills’ provisions on “comparative effectiveness research,” which evaluates the effectiveness of treatment and therapies, but states that “we must find ways” to encourage health-care providers to adhere to evidence-based guidelines on care.

The desire to regulate treatment decisions which is not in government regulation is consistent with current trends in health care. While conservatives worry about a government take over of health care, it is typically insurance companies and not government which interferes in the doctor-patient relationship. While it is desirable that results of comparative effectiveness research be voluntarily used by physicians, it is dangerous to write this into law. Decisions in the cases of individual patients who have multiple medical problems often legitimately vary from generic practice guidelines which are usually written based upon a single disease state. The physician, and not insurance companies, businessmen, or government bureaucrats must make the ultimate decisions. Fortunately the current health care legislation avoids any acts to place bureaucrats between doctors and patients, despite the claims from the right.

Even though health care reform might be good for business, some pro-business groups still plan to spend millions on ads opposing health care reform.

There is one business which benefits by preserving the status quo–the insurance industry. An analysis from Goldman Sachs found that the insurance companies would profit the most from preventing any form of reform. If health care reform does pass, they are projected to do better if there is no public option. No wonder the health insurance industry has been working so hard to provide all those bogus talking points for the right wing to use.

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  1. 1
    Eclectic Radical says:

    ‘While it is desirable that results of comparative effectiveness research be voluntarily used by physicians, it is dangerous to write this into law.’
    One has to take the mindset of a management-level corporate executive into account when considering their positions on the issues…
    Generally speaking (there are exceptions) corporate executives are acculturated into a decision making process that is authority oriented. That process includes a controlled degree of input and a controlled degree of debate and than an authoritarian decision is made by one person or a small group of people and then enforced in an authoritarian manner. They believe in ‘the best way’ to do things and they believe that ‘the best way’ should be enforced so that everyone must use it, believing in authoritarian enforcement of system rather than individual experimentation and innovation.
    Therefore the idea that a panel of ‘experts’ would find the best way to do everything in the medical field and those decisions should be enforced strictly by law in a systematic way is the only natural opinion one can expect.
    It’s how the corporate culture thinks.

  2. 2
    Ron Chusid says:

    Makes sense. How do we explain why corporate culture thinks this way but the government does not?

    This also makes me wonder how medical practice is in the military. I have no first hand experience. I suspect that watching M*A*S*H might not count. We do know from Fort Hood (and all the news accounts on the shooter’s background) that they have a hard time getting rid of misfits, but I doubt his case is typical of medical practice in the military.

  3. 3
    Eclectic Radical says:

    ‘Makes sense. How do we explain why corporate culture thinks this way but the government does not?’
    This appears to be the problem, as the people most frightened of an authoritarian government do no appear to have any understanding that corporate management is far more authoritarian than government with far less oversight.
    As for why corporate culture is like this, it’s fairly simple: corporate culture is an elitist/aristocratic culture. The aristocracy is one of ‘merit’, technically, but the thinking processes are aristrocratic rather than democratic. Rather than being responsible to their employees, corporate management is responsible for their employees. Though they are, in theory, responsible to stockholders the actual degree of communication between public stockholders and the board of directors is very loose. Even on the ‘democratic’ side of capitalism, the system is more ‘aristrocratic’ because the votes are linked to stock and the more stock one owns the more votes one has.  So a board of directors with contol of a majority of voting stock is an aristrocratic body that cannot be challenged by the ordinary stockholders.
    The system is the very opposite of democratic in every way.
    Government, on the other hand, is more properly ‘democratic’ despite the amount of public authority involved. Someone loses every election, and while the statistics for Congressional elections (both House and Senate) actually favor incumbents by a huge margin one finds that a few incumbents are defeated in every election. So legislators really are responsible to their constituents in a practical way and, moreover, most of them legislate accordingly… they work to avoid angering their constituency so they can stay in office. For all our system’s genuine flaws, it does a far better job of reflecting the ‘will of the people’ than we like to admit.
    Indeed, one of the biggest roadblocks to meaningful reform has always been the relatively conservative (in the classic sense of maintenance of the status quo rather than the reactionary movement taking the label today) bent to the weight of public opinion. Liberal reform has nearly always had to swim up hill against conservative public opinion until social progress or some cultural upheaval opened the doors for reform. This is why many of the classic radicals of history lost patience with democracy and one of the reasons I am occasionally cynical about it myself, though I tend to agree with Churchill on the matter.
    So governmental authority is based on the knowledge that one is always responsible to a higher authority somewhere along the ladder, and even the highest authorities are responsible to a consituency with the power to fire them at whim every so many years. It is also based on a measurable moral scale, even if many officials fall short of what we would call sterling character.  Corporate authority is based on a knowledge that the corporate bottom line is all that matters: there is not a moral scale that figures into it. There is no accountability from above if one produces and no accountability from below at all.
    I obviously failed the elevator test, but there is the basic philosophical statement we have to boil down to produce the new left wing political jingle.
    I’m finding that ‘svoboda not volia‘ just goes over most people’s heads. 😉

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