Big business: Health care bill compromises America's workforce

Here are the changes to the GOP health care bill
Here are the changes to the GOP health care bill

David Lansky is President & CEO Pacific Business Group on Health, a non-profit that seeks to improve the outcomes, experience and affordability of America's healthcare system. PBGH represents 60 employer members, who provide coverage to nearly 10 million individual in the United States.

The business community has been relatively quiet during the debate about the Better Care Reconciliation Act -- the health care bill currently being debated in the Senate.

Many business organizations support the proposed rollbacks of various taxes and mandates, but few have made public statements regarding the cutbacks in Medicaid and reshaping of the individual insurance markets. This silence, however, should not be interpreted as indifference. Large employers -- who provide health benefits to 177 million Americans -- have a major stake in the outcome of this debate.

Most large employers support elements of the health care bill that improve the efficiency and flexibility of employer-sponsored coverage. For example, the repeal of the employer mandate should reduce reporting requirements imposed on employers, thereby lowering administrative costs. In addition, employers generally support higher limits on contributions to Health Savings Accounts (HSAs) and the more flexible use of HSA funds in high-deductible health plans.

Related: What's inside the Senate Republican health care bill

At the same time, many employers are concerned about the dramatic reductions in coverage resulting from proposed cuts to the Medicaid program and insufficient mechanisms to stabilize the individual market. There is a strong business case for policies that ensure that all Americans have meaningful health insurance coverage. The adverse consequences of having large numbers of uninsured extend well beyond the individuals and families directly affected. Large employers would also feel the impact.

First, hospitals would respond to an increase in the number of uninsured patients by increasing prices for commercially insured patients. This "cost shift" occurs when providers serve patients with no coverage and can't cover those costs from government sources. It imposes additional financial burdens on businesses and their employees.

This is especially problematic given that health care costs are already much too high for employers and patients. Premiums for family coverage have increased 58% since 2006, and experts predict a 6.5% increase in health care costs in 2018 — three times higher than general inflation.

High health care costs put American businesses at a competitive disadvantage. As Warren Buffet recently said, "medical costs are the tapeworm of American economic competitiveness."

We shouldn't be adding to this burden.

Furthermore, it's critically important for employers to have a healthy workforce. Newly hired employees who have not been able to afford coverage previously are likely to have deferred treatment for their medical needs. When they start work, they are likely to get the elective surgeries that were postponed when they didn't have health care coverage. New employees with chronic medical conditions, such as diabetes, may have significant health problems that were not managed effectively while they were without health care coverage. All of this adds to the cost burden on employers.

Related: Trump: Senate GOP needs to fulfill promise to end 'Obamacare nightmare'

For part-time workers and early retirees who are not eligible for employer-sponsored health benefits, it's important to have a well-functioning individual (non-group) market. Congress should take immediate steps -- including funding the cost-sharing reductions -- to stabilize the exchanges and ensure that coverage is reasonably comprehensive and affordable.

From a broader perspective, it's important to recognize that reducing coverage and cutting benefits do not address the fundamental problems of the U.S. health care system. The Senate Republican health care bill would reduce government spending, but it wouldn't reduce the underlying costs. America spends far more than any other country on health care, but our outcomes are below average for developed countries on most key health care indicators.

Health care costs are strangling the economy, particularly U.S. businesses, the engines of job growth and innovation. One-third of all health care spending -- $1 trillion every year, representing nearly 6% of our national GDP -- is spent on wasteful, unnecessary patient care. Rising health care costs are preventing U.S. businesses from creating jobs, raising wages and investing in innovation, and they are limiting America's ability to invest in national priorities such as infrastructure, research and innovation, education, and national security.

Related: Nobody wins if Congress simply repeals Obamacare -- except the rich

This problem is largely a result of the reliance on a fee-for-service system which pays doctors and hospitals based on the volume of services with little regard for quality, as well as the lack of transparency and meaningful measures of health care quality.

By infusing more market forces into our health care system through value-based purchasing strategies, we can decrease costs while improving care quality, which will in turn make resources available for reinvestment into the economy. We won't solve our health care problem until we have comprehensive reform that fundamentally changes the way we deliver and pay for health care services.

Any policy changes that result in increasing the number of uninsured would not only hurt the families involved, but would drive up health care costs for employers as well. Congressional leaders should find a way to improve our health care system without shifting health care costs to businesses and their employees and compromising the health of the American workforce.

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