AHIP: There is Still Hope for Health Reform

The other crucial ingredient was cost containment. “We see data before others in the delivery system do,” Ignagni said. “We knew what was happening on the unit cost front. We knew it was going up quite significantly. We knew it was likely to continue, because we were seeing the bills. As a result, we pointed out to Congress that now is the time, as we think about getting everyone in, to think about laying down enduring cost containment.”

Ignagni said several key components of health reform need to be re-evaluated by both the private and public sectors. Those components include malpractice reform, the overall cost of health care (which, she noted, amounts to an additional 3% sales tax on small businesses in addition to increased premiums), adjusting ratings bands so that young familes do not bear an excessive share of health care costs, and implementing a mandate for health care.

“For the states that have already tried this, there have been massive problems if everyone doesn’t participate,” Ignagni said.

The federal health care mandate imposes only a $95 penalty–or 1% of income, whichever is greater–in year one, Ignagni said. “If you’re facing a $20,000 hospital bill, $95 is not very much,” she said. “Add to that the compression of ratings bands, the sales tax in ’14, and we have sown the seeds for a major problem.”

Ignagni laid out a 5-part solution for sustainable health care.

1. The Obama administration should continue its work at making sure the transition steps needed to implement heath reform cause as little disruption to the current system as possible.

2. More has to be done to ensure that employers can keep the health plans they have.

3. Renew the focus on cost containment.

4. Promote health care delivery and payment reform, by, for example, helping to come up with definitions for the services that should go into standard bundles of hospital services.

5. Do more to improve the safety and effectiveness of care. “Too many are still on the wrong end of medical errors,” Ignagni said.

Ignagni concluded by saying that the current health care system has an opportunity to move forward in a way that the economy can be sustained, there can be relief on cost, and improvements can be made to productivity, value and consumer satisfaction. She also noted that the ideal solution would be a blend of both public and private resources.

“There are a number of forks in the road, and many paths left to travel,” she said, “but the path that all of us have a strong stake in is one that makes health care sustainable and workable and cost effective not just for the next decade, but for the next generation.”