NEWS RELEASE

May 12, 2009
PR-09/16
For additional information:
Jason Hammersla
202-289-6700
jhammersla@abcstaff.org

Addressing the health care financing challenge should begin with systemic cost and quality reform

WASHINGTON, D.C. — “Just as the Hippocratic oath compels physicians to ‘first, do no harm,’ comprehensive health care reform should preserve and build upon the employer-sponsored system that already benefits more than 160 million Americans,” Council President James A. Klein said in reference to today’s Senate Finance Committee roundtable hearing. “As such, the challenge of financing this effort should begin by reducing costs and inefficiencies in the existing system. We were pleased to see President Obama make essentially that same point just yesterday.”

The Council’s testimony before the committee enumerates four key principles for financing health care reform while still safeguarding workers’ existing health care plans. Lawmakers must:

1. Enact systemic changes that will mitigate cost increases and, thereby, restrain the need for greater revenue;

2. Proceed conservatively in estimating costs, savings and revenue – it is better to err on the side of overestimating the cost of expanding health coverage and underestimating the savings or revenue from various financing proposals;

3. Reforming the health care system is a societal imperative, and the responsibilities associated with doing so should be shared equitably by the stakeholders in the system; and

4. Ensure that Americans can keep the coverage they enjoy, which for most people is employer-sponsored coverage. Financing and other policies should protect and build upon employer-based health coverage.

“Health care reform will be costly, but spending more money is not the only solution to the system’s challenges. Indeed, among the most compelling reforms required are those that, if designed properly, will help reduce costs and obviate, to some extent, the need to raise revenue,” Klein said. The Council’s vision of health reform, as listed in its Condition Critical report, released in January 2009, makes numerous recommendations for cost savings and containment. These include increased efficiencies, continuous improvements in quality of care, better transparency in the pricing and quality of providers and their services and the use of standard health information technologies among providers and related institutions.

“Lawmakers may be tempted to reconsider the existing tax treatment of employer-sponsored health benefits on the theory it will hold down health costs,” Klein said. “It is hard to imagine that employers or America’s families need any additional incentives to reduce health care costs. We doubt the nation would want to experience diminished health coverage based on such an untested theory,” Klein said.

Klein concluded, “Enacting comprehensive reform will be a difficult and costly task. Just as the deliberate policy process should weigh the needs of all stakeholders, all stakeholders should equitably share the burden of financing a reformed health care system. If employer-sponsored benefits are to continue providing valuable health coverage to the majority of Americans, lawmakers must first do no harm.”

Klein’s full testimony is available on the Council’s web site. For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.