Legislative impact on health care Featured

11:47am EDT July 31, 2006
As our government struggles with the issue of how to handle escalating health care costs, several alternatives have surfaced as possible solutions. Where market reform stands as one of the most talked-about options, more extreme solutions like universal health care are also being discussed.

While individual businesses scramble to deal with their own rising costs, there is a bigger picture that should also be considered.

“Over the last five to seven years, there have been a lot of discussions about health care costs and who is going to pay for them,” says Joe Wise, senior director of government relations at UPMC Health Plan in Pittsburgh.

Smart Business spoke with Wise about how companies can stay on top of legislative activities and better understand the implications that those activities have on their health care options.

Why should companies be concerned with legislative activity that involves health care reform?
For starters, the tax implications on businesses are incredibly important as state budgets tighten, and as those look to the private sector more and more for their solutions. If companies aren’t fully engaged and fully focused on what their legislators are trying to do, both at the state and federal level, they may find themselves on the opposite side of a tax bill, single-pay or universal care health care bill — all of which have to be paid for. Inevitably, the government will look to businesses to help cover the expenses associated with those programs.

The present system is based on a public-private partnership. What we’ve seen over the past decade or so is an increasingly viable and productive relationship between government and the private sector to provide health care for the employees and the community at large. We’ve seen this system work here in Pennsylvania in terms of the dollars derived from public-private partnerships like the Pace program (prescription drugs for seniors), as well as Medicare and Medicaid. Through these programs, the public-private partnerships provide market-based solutions instead of having the government pay for everything.

What are some of the challenges of universal health care?
Right now the Canadian legislature is struggling to find money to support a government-backed health care system, and a similar situation is unfolding in Britain. The problem is that these systems often wind up with major backlogs from the patient’s perspective. If it takes four to six months to get a basic heart operation, then the cost to society comes not only in dollars, but also in lost productivity.

Universal health care can also wreak havoc on the provider landscape. For instance, many Canadian physicians are looking to leave their system and come to the U.S. because they’re fed up with the universal care system.

Yet another challenge is, ‘Who pays for all of this?’ The issue is particularly important for businesses, which may be called upon to help support a system because the government simply cannot pay for everything.

How do the costs of market-based reform compare to the costs of having a government-run system?
Universal care may sound like a great one-size-fits-all solution for companies in theory, but it’s not. In looking at the total cost of supporting such a system, the government will pick and choose what it can pay for and how soon it can pay. Where companies will feel the greatest impact is in lost productivity, since the government will offset the billions it pays out every year by limiting access through these means, and by making it difficult for companies to keep their work forces healthy and productive.

What can a company do to provide its workers with affordable, quality care options that best suit their needs?
Businesses need to be fully aware of what’s going on at both the state and federal level. What is their state representative doing? What legislation is out there right now that could impact their business? How is it going to impact their business? It’s a matter of becoming more aware and realizing that this isn’t a situation where you can sit back and say, ‘Here’s our problem, you fix it.’

Companies must become a part of that solution by activating themselves now, as opposed to waiting two or three years down the road when a single-care or universal care system is foisted upon them.

What has the insurance industry done to jumpstart the process?
The insurance industry is working directly with the Pennsylvania governor’s office and the state legislature to help craft legislation that take into consideration the impact on the state’s businesses and on employees. The industry is also developing products that fit almost every employee through products like inexpensive, high-deductible programs.

JOE WISE is senior director for government relations at UPMC Health Plan in Pittsburgh. Reach him at (412) 454-5175.