Charles Kolb, president of the Committee for Economic Development, a business-led think tank here in D.C., took part in a New America Foundation panel discussion this spring about the economic burden that health care puts on our nation's businesses. We were particularly struck at the time by Kolb's perspective on just how seriously the health care system has declined, and how bold the solutions must now be. The CED understands bold; created in 1942, it helped draw up what eventually became the post-war Marshall plan. With Kolb's permission, we're sharing an edited version of his remarks that day. For more detail on the CED's health care proposals, see the long version here or the summary here ).

Six years ago, the CED looked at health care and concluded that the employer-sponsored system was sustainable, it was fixable. We recommended a number of things that the government could do, that the private sector could do, that individuals could do. We thought through all the little tweaks, how to take better advantage of the market power that employers had, how we could save the system.

Nothing happened.

Actually some things did happen: The system got worse. The costs continued to escalate faster than GDP and the number of uninsured rose. And, the impact on business is even worse. We now see situations where families are actually facing bankruptcy with catastrophic or near-catastrophic health care expenses. We are outspending the rest of the world in the aggregate and on a per capita basis, yet we're not living as long as people in countries that spend less. The health care system we have now is simply not working. It is not sustainable.

The employer-sponsored system, as we know it, is not sustainable for a number of reasons. Employer-based health insurance is costly to market and to administer—roughly 20 percent of the total plus employer costs. (That's far more than it would cost if there were competitive regional exchanges that equalized risks.) And the employer-benefits system leaves out too many people. It leaves many others insecure. It depresses real wages and interferes with the efficiency of the job market. "Job lock" blocks people from going out and starting their own businesses. The employer-sponsored system even interferes with the continuity of medical care and medical records. As people change jobs, they are forced to change doctors and delivery systems. This gives health plans short-term incentives in a world where median job tenure is short. The whole system, the way it has been structured and how it's evolved since World War II, when we stumbled into it, is frankly, now, an anachronism.

If employers could fix it themselves, they would, but we've talked to them and they can't. So the question is, when you have a basically dysfunctional system, how do you move beyond it? The debate on healthcare in this country starts generally from an ideological premise. On the right, people say we must let the markets drive everything. And, on the left, we have to have universal coverage, typically by folding everything into a Medicare-for-All system. Both starting points, in my view, are wrong. It is not a question of ideology: We need pragmatism.

CED proposes establishing an independent body or a "Health Fed" that would oversee regional health insurance exchanges or markets. The "Health Fed" would modernize and simplify insurance regulation and ensure standards. This would build on and improve the current Federal Employees Health Benefits Plan. Only quality plans with broad coverage would be allowed to compete.

Second, we would grant fixed dollar credits to every American to purchase health insurance. Needless to say, we would get rid of the current tax treatment.

Finally we would create a National Institute for Medical Outcomes and technology assessment to help provide authoritative, scientific information about the value and costs of clinical interventions.

We also need to use the IT revolution—the whole movement towards openness can help drive down health care costs and increase efficiencies. The health care system simply does not take full advantage of the technology that has evolved over the last 20 or 25 years. You have been to a doctor's office recently, you have to fill out the same form five times and tell them your Social Security number and your birth date, that paper goes somewhere. There are people who file it. You can follow on the costs that are associated with just that one failure to take advantage of the technology. Not to mention the wonderful handwriting that most physicians have when it comes to writing prescriptions.

So, each healthcare consumer would receive fixed dollar amounts to purchase health insurance from the regional health exchanges. They'd be able to make cost-conscious decisions. What we proposed is very similar coincidentally—this was not intentional, it was a wonderful coincidence—to what was emerging in the Senate as the Wyden-Bennett Healthy Americans Act. We are very grateful for the bipartisan interest that seems to be emerging. [Click here to see what the CBO has said about the bill.]

I am confident that the American people are getting sufficiently fed up with the lack of cooperation between the parties. Whoever is elected president, we have an opportunity to get a breakthrough, if we can help people understand the facts and how the system is not working. But we have to go beyond the "bipolar"—in every sense of the term—starting point and realize it is failing our workers and our economy. Whatever your ideological views are, the system is not meeting the needs of the 21st century workforce.

Having said that, at CED we have absolutely no illusions that this will be easy. We are talking about reforming 16 percent of the gross domestic product. So, when you look at all the interests and parties and dollars that are involved, change is going to be extremely difficult. But, we simply cannot afford to waste another decade, either for the people who are affected by the system or for our economy. The world of work has changed dramatically in the last 10 or 15 years. Our healthcare system has not.