U.S. health care system: “most expensive, crazy structure in the world”

The New America Foundation (NAF) held a discussion on “Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms,” with opening remarks by Sen. Debbie Stabenow (D-Mich.). She said the U.S. is losing jobs because of the structure of health insurance and the inability to lower costs. She said the U.S. has the most expensive and crazy structure in the world for health insurance, and that this creates a competitive disadvantage. Stabenow, and other senators, are working on the Healthy Americans Act to address these problems.

Len Nichols, director of the Health Policy Program at NAF, said health care costs are going up, and that firms are pushing health care costs into wages while unions push back. He said the hourly cost of health benefits for the manufacturing trade in the United States in 2005 was $2.38, compared to $0.86 in Canada. He said that the driving factors for this difference are the increase in employers’ cost share and an inefficient health system. He feels “the employer role is good health policy and good economic policy,” and suggests extending “the advantages of the employer system for all Americans.”

Charles Kolb, president of the Committee for Economic Development (CED), said the employers’ role in financing health care needs to change. He said the U.S. is outspending and yet under performing in health care, and that to compete in the international economy the country needs a healthy workforce. He said the employer sponsored system is not sustainable, for reasons including high costs, low efficiency, and the fact it leaves people out. He and CED suggest creating independent regional “exchanges” to provide “a single point of entry for each individual to choose among competing private health plans.”

Andrew Webber, president and CEO of the National Business Coalition on Health, had a different point of view, which he said was less “gloomy.” He agrees that U.S. employers pay more than the rest of the world, that employers can’t shift costs, and that the business community can’t raise prices because of global competitiveness, but he is not ready to “throw in the towel” on the employer based system. He believes that if the employer community got together and was serious and aggressive, they can fight for transparency, better performance, higher quality, and more efficient costs for health insurance. He said he is not ready to pass health care over to consumers to fight for on there own.

Gerald Shea, assistant to the president of government at the AFL-CIO, said he provided the workers’ perspective to the discussion. He said employers want to be involved and provide health care, but that the system can’t continue in this way. He said from the unions’ point of view, workers are accepting lower wages to maintain the same health care benefits, since people can not do without health care. He said group purchasing is the key to having the power to control costs.