HEALTH CARE: WHOSE BUSINESS IS IT?Philip EdmundsonChairman & CEO, William Gallagher AssociatesCo-Chair, Alliance for Business LeadershipHealth Promotion Initiative
PROGRESS: UNIVERSAL HEALTH CARE COVERAGEMassachusetts• The Commonwealth led the nation in providing universal health care coverage to its citizens in 2006.United States• The Affordable Care Act, modeled on MA law, was passed in 2010 and upheld by the Supreme Court in 2012. It requires all states to establish exchanges for the purchase of health insurance by 2013.• The first step in health care reform has been accomplished: universal coverage that includes everyone in the system and overcomes the risk of adverse selection.
CHALLENGE: SPIRALING HEALTH CARE COSTSUnited States• National health care expenditures accounted for 18% of GDP in 2011, and are heading for 20% by 2020 (Health Affairs).Massachusetts• Health care spending has been growing in MA at least twice as fast as the rest of the state’s economy (Kaiser Family Foundation).
COST DRIVERS IN HEALTH CARE• Hospital costs, physician costs, medical technology, plan administration, government regulation, and waste, fraud and abuse are leading cost drivers.• Many of these services and products are necessary.• What is unnecessary? The amount of money spent on treating chronic disease.• $3 out of every $4 spent on health care goes to treat chronic diseases, many of which are preventable.
WHAT’S THE BIG IDEA?The Alliance asked 2 renowned economists “how canbusiness best leverage change in health care thatpromotes wellness and reduces costs?” Jonathan Gruber, MIT – business should focus on the demand side of the equation (workplace wellness, health plan design) David Cutler, Harvard – business should focus on the supply side (help drive innovation and efficiency in health care delivery)• Attend Alliance Forum: convening businesses, health care providers and academic experts to discuss how innovation stands to impact health care costs
WHAT CAN GOVERNMENT DO TO PROMOTE HEALTHAND REDUCE COSTS?Federal Level• Uphold the Affordable Care Act – ensure that all Americans have health insurance coverage.• Provide Funding for Medical Research – NIH funding sustains innovation in medicine, creates jobs and contributes to a better quality of life for many Americans.• Provide Funding for Public Health – The U.S. spends 75% of health care dollars treating chronic disease and dedicates less than 5% to preventing it. We need to focus more on prevention.
WHAT CAN GOVERNMENT DO?State Level• Health Care Cost Containment – August 2012, MA Legislature passed legislation to bring state health care spending in line with gross state product.• Workplace Wellness Tax Credits – Included in the law: 25% of cost, up to $10,000, in tax credits for workplace wellness programs.• Public Health Funding via a Soda Tax – Not included in the law: provision to eliminate the tax exemption on soda would yield $40 to $50 million in revenue.
WHAT CAN BUSINESS DO?Establish Workplace Wellness Programs• Effective 1/1/13, a new state tax credit will support business costs up to $10,000 for these programs.• Department of Public Health is in the process of promulgating regulations on eligible programs. Join the Alliance as we weigh-in.Alter Health Plan Design• Consider tiered health network plans or high deductible health plans with Health Savings Accounts (HSAs) as options that can reduce cost and educate employees to be smarter consumers of health care.
QUESTIONS FOR BREAKOUT SESSION1. Has your company established workplace wellness programs? What are the barriers and opportunities?2. Has your company considered alternative health plan design options? Why or why not?3. Would you attend an Alliance forum on innovation in health care delivery? What other big ideas in health care reform should the Alliance pursue?
CONTACT INFORMATIONPhilip Edmundson, Co-ChairThe Alliance Health Promotion Initiativepedmundson@wgains.comKelly Bovio, Senior Policy AdvisorThe Alliance for Business Leadershipkbovio@allianceBL.orgThe Alliance for Business Leadershipwww.AllianceforBusinessLeadership.org