Powerful health care groups offer optimism on overhaul

Support more coverage but want right bill

By Lisa Wangsness
Globe Staff / November 13, 2009

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WASHINGTON - Two powerful health care interest groups yesterday urged lawmakers constructing a sweeping health care overhaul to focus on cost containment and affordability.

The Business Roundtable, an association of top US business executives, issued an analysis saying the right combination of changes Congress is considering could slow health care cost growth by 15 percent to 20 percent over the next decade.

But the group warned that its support for any final bill would depend on how aggressively it constrained costs.

The roundtable’s report found that the changes under consideration could reduce average premiums by $3,000 per employee by 2019.

But the savings could be even greater if lawmakers implemented cost-containment measures - such as initiatives to pay doctors for quality and efficiency, not just for the number of treatments provided - faster and more broadly, the group said.

“Making the right choices as the final health care bill gets crafted is essential, and we are committed to working with Congress and the administration toward a bill we can support,’’ Antonio M. Perez, chairman of the roundtable’s Consumer Health and Retirement Initiative and chief executive officer of Eastman Kodak Co., said in a statement.

The report was not a full endorsement, but the White House was clearly heartened by the business group’s report, particularly because other business organizations, such as the US Chamber of Commerce, have been airing commercials opposing aspects of the health plan.

President Obama, who was traveling to Asia yesterday, said in a statement that the report “underscores what experts and business people have told us all along - comprehensive health insurance reform is one of the most important investments we can make in American competitiveness.’’

The head of the insurance industry lobby reiterated a number of concerns about the health care bill yesterday but emphasized the industry group still believes a large-scale health overhaul is needed this year.

“We think now is the time to do it,’’ said Karen Ignagni, chief executive officer of America’s Health Insurance Plans.

The industry issued a report last month warning that premiums could skyrocket under one Senate committee’s proposal. Despite the industry’s warnings that a government-backed insurance option could sink private insurers, the House included a public option in its bill, and Harry Reid, the Senate minority leader, has proposed putting a modified version in the Senate bill.

But in a briefing for reporters yesterday Ignagni focused on the need for major change, and for keeping costs in check.

She noted that the nonpartisan Congressional Budget Office projects health care costs will increase by 6.2 percent a year on average over the next decade, which would almost certainly be faster than the growth of the overall economy.

“The current system cannot be sustained the way it is,’’ she said.

Ignagni echoed the business group’s assertion that cost-containment efforts should be spread more broadly across the entire health care system, not just confined to experimental projects within Medicare.

If goals for slowing cost growth are not met, she said, there should be a backup plan.

She also warned that the bill the House passed could thrust too much of the cost of health care onto the shoulders of younger people because it lets insurers charge older people - who typically incur much higher medical bills and whose incomes are generally higher - just twice as much as younger people. A Senate bill would let insurers charge people in their early 60s up to five times as much as those in their early 20s.

Ignagni said the federal government could save money and make premiums more affordable across the board by setting the ratio at around 5 to 1 and giving older people extra subsidies to help them afford their premiums.

Insurers say that setting the ratio closer to the House’s proposal would cost more because more younger people would qualify for federal premium subsidies and because fewer younger people would buy insurance if premiums were too high, so the risk pool would be older and sicker.