Industry Maintaining Watch Over COLI Legislation's Passage

One of the primary factors behind the cost increase is a lack of productivity in the health care sector, which he says, lags behind other sectors of the economy on this key performance measure.

Jasinowski says studies indicate that between 25% and 33% of all health care spending is for services that are unnecessary, out-of-date and detrimental to patients.

“There is redundancy and waste in the system,” he says.

He also cites a recent Institute of Medicine report that says some 100,000 people in the U.S. die each year due to medical errors.

Manufacturers, he says, must absorb at least some of the resulting costs if they are to continue to provide health coverage to their employees.

However, Jasinowski says, the situation is becoming critical.

Health care spending, he says, now accounts for 14% of the nations Gross Domestic Product, which is twice as much as the amount spent on computers and information processing.

Spending could reach 20% of GDP by the end of the decade, he says.

It is vital, according to Jasinowski, that consumers and small businesses have the tools necessary to make decisions about health care quality.

Only the federal government, he says, has the resources and reach necessary to disseminate quality information.

“What the manufacturing sector and all of business needs desperately is a comprehensive mechanism whereby the quality of health care options can be measured and evaluated, and NAM believes that a public and private sector partnership could well provide it,” Jasinowski says.

Finally, the American Council of Life Insurers, Washington, reports that U.S. trade negotiators are working with Japanese negotiators to try to resolve industry concerns over Japans government-owned life insurance, named Kampo.

Bill Freshwater, associate director and counsel for international relations with ACLI, says there has been some movement. However, he says, it is hard to predict how far it will go during the next year.

One of ACLIs biggest concerns, expressed during a recent press briefing, is the fact that Kampo does not pay into Japans policyholder safety net fund that is mandatory for other insurers.

Freshwater says there has been no discussion yet on the substantive issues raised by ACLI. Rather, he says, the discussion has been more general, with Japanese trade representatives saying that while Kampo does have advantages not enjoyed by other insurers, it also faces offsetting restrictions on its business activities that do not apply to other insurers.

Freshwater praises U.S. trade negotiators, however, as strong advocates who understand the concerns raised by ACLI. He says they will not let up and will continue to push for reform.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 9, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.