Health Policy

Committee for a Responsible Federal Budget Event Covered By the Wall Street Journal | 'Vital Signs in Health-Care Debate'

Communications — Tue, 13 May 2008 16:45:00 -0400

New America in the News:

The Committee for a Responsible Federal Budget’s April 29 event that highlighted the presidential candidates' domestic policy plans appeared in David Wessel’s column in The Wall Street Journal (5/1/08). New America's Health Policy Program Director is quoted in the article.

. . Mr. Nichols says that Sen. McCain's plan to allow people in one state to buy individual insurance in another -- essentially deregulating this part of the insurance market -- amounts to "ideology trumping policy." Rational insurers will attract the healthy with low premiums and boost premiums for those with pre-existing conditions. "Fifty to 75 million Americans will discover what 'actuarially fair' really means," he says. (Sharply higher premiums.) The result, he predicts, will be a rush to Medicare-for-all that Republicans will hate. . .

Crossroads in Quality

adminn — Tue, 13 May 2008 11:43:00 -0400

Expanding insurance coverage is a critical step in health reform, but we argue that to be successful, reforms must also address the underlying problems of quality and cost. We identify five fundamental building blocks for a high-performance health system and urge action to create a national center for effectiveness research, develop models of accountable health care entities capable of providing integrated and coordinated care, develop payment models to reward high-value care, develop a national strategy for performance measurement, and pursue a multistakeholder approach to improving population health.

* * *

For the full text of this essay, please see the… more

The Long Road To Health Reform Requires Bipartisan Leadership

adminn — Tue, 13 May 2008 09:27:00 -0400

The United States appears headed toward another national debate about health system reform. Worry about access and health system deficiencies has reached critical mass, and polls indicate that health care leads the domestic agenda for the 2008 elections. This debate, like previous debates, will succeed or fail in Congress. We highlight key elements of recent sagas in health legislation and offer advice to the next president and Congress for improving the likelihood of a successful outcome in 2009-10:

make health reform a top legislative priority; be leaders, not partisans; and develop broad policy consensus but leave the policy details to Congress. more

Employer Health Costs in a Global Economy

Communications — Thu, 08 May 2008 22:00:00 -0400

A New America Event
05/09/2008 - 10:00am

Voters are sending a clear message: they are concerned about the economy and worried about being able to afford health care. To examine this important nexus of health care and the economy, the New America Foundation welcomed Senator Deborah Stabenow (D-MI), the Wall Street Journal’s Laurie McGinley, and representatives from the business, labor, and economic communities to discuss the impact of rising health care costs on U.S. competitiveness and American jobs. The Capitol Hill event was focused on the recent work by Len Nichols and Sarah Axeen entitled, “Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms.”

Senator Stabenow kicked off the event by thanking Len and New America for producing the data necessary bolster what she has believed for years: our nation’s health care crisis costs Americans jobs and hinders the ability of U.S. businesses to thrive in a global economy.

Len Nichols, Director of the Health Policy Program at New America, argued that while economic theory teaches us that it is workers—rather than employers—who pay for health care through lower wages, employers face a variety of constraints that may make it difficult for them to fully shift health costs in the short run. Therefore, health care costs are having a real effect on employers and workers.

Following Len’s presentation, Joe Antos from AEI spoke about the importance of focusing on the steps necessary to get our nation from its current health system to a reformed system. Charlie Kolb, President of the Committee for Economic Development, stressed the need to transition away from an employer based system, while Andrew Webber, President and CEO of the National Business Coalition on Health, argued that employers should demand the changes necessary to continue to offer health benefits and improve the system. Finally, Gerald Shea, Assistant to the Director of Government Affairs for AFL-CIO, stressed the need for substantive change through a public-private partnership. Shea emphasized that the status quo is unsustainable for workers and employers. Panelists were largely in agreement that rising health care costs represent a serious problem for employers.

Stay tuned as the Health Policy Program continues to examine the economic case for a quality health care system for all Americans.

Len Nichols and Elizabeth Carpenter in BNA | 'Report Says Health Costs Hamper U.S. Firms'

Communications — Wed, 07 May 2008 07:46:00 -0400

New America in the News:

Full article (subscription only)

Employer health costs put U.S. firms at a competitive disadvantage compared with certain trading partners, highlighting the need to separate health coverage from employer financing, according to a report scheduled for release May 7.

The report by the New America Foundation found that, while U.S. manufacturers pay $2.38 per hour for health benefits, five of the country's major trading partners pay an average of $0.96 per hour. The report looked at health care costs in Canada, France, Germany, Japan, and the United Kingdom compared with the United States.

The results do not indicate that U.S. firms are not competitive overall, but it does mean that "all else being equal, employer health costs make the United States less competitive than it could otherwise be," according to Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms.

U.S. business leaders are aware of the effects high health costs are having on them, Len Nichols, director of the Health Policy Program at the New America Foundation and lead author of the report, said. Knowing that they cannot remain competitive if they shift costs to workers or raise prices, they are increasingly pushing major reform efforts. . .

Additional changes are needed, though, to improve outcomes and curb costs, Nichols said. Those changes include market reforms to ensure all people have access to health insurance, as well as improvements in the health care delivery system through comparative effectiveness research, consistent use of best practices, and information technology.

Ending employer-based financing must be accompanied by an improved delivery system because compared to foreign companies, U.S. firms are "still paying a bigger chunk of a bloated bill," Nichols said.

The market reforms would include plans for guaranteed issuance, as well as subsidies to ensure that all those seeking insurance can pay for it, according to Elizabeth Carpenter, a senior program associate for the health policy program.

The New America Foundation describes itself as "a nonprofit public policy institute that was established through the collaborative work of a diverse group of public intellectuals, civic leaders and business executives."

Link to the report:
http://www.newamerica.net/publications/policy/employer_health_costs_global_economy

Len Nichols in Los Angeles Times | 'Healthcare Costs Pinch Employers'

Communications — Wed, 07 May 2008 07:39:00 -0400

New America in the News:

Full article

U.S. manufacturers who provide health insurance spend an average of $2.38 per worker per hour on healthcare -- more than twice as much as their foreign competitors, an analysis released Tuesday found. . .

But the new analysis suggests that neither lower wages nor higher prices are an option for most companies. Employers can't slash wages fast enough to keep up with rising healthcare costs because of minimum wage laws, union contracts and other factors, said economist Len Nichols, the analysis' author and a policy director for the New America Foundation.

"There's no question that if employers could push this into wages they would," Nichols said. "But every single year, healthcare costs rise faster than productivity and wages," he said. "Thus, they try to push it into prices. But with China and India competing against you, you can't do that." . . .

Nichols found that healthcare costs were outpacing wages and productivity. With stiff global pricing competition, that means healthcare costs have to come out of the bottom line, he said.

"That," he said, helps "explain why so many employers are hyper-focused on health reform this time around compared to 1992-93."

Nichols said his study was prompted by a question from a manufacturer in the Midwest who was shifting his jobs overseas. "My question for you is this," Nichols recalled, "who is going to buy my stuff? If we move jobs overseas, who is going to be able to buy our middle-class stuff."

Link to the analysis: http://www.newamerica.net/publications/policy/employer_health_costs_global_economy

New Report Shows Impact of Employer Health Care Costs on Global Competition and U.S. Jobs

Communications — Wed, 07 May 2008 05:22:00 -0400

Contact: Elizabeth Carpenter New America Foundation 401-529-9379 (cell) 202-261-6585 (office) carpenter@newamerica.net

Washington, DC -- Rising health care costs undermine the ability of U.S. firms to compete internationally and threaten good American jobs, according to a report released today by the New America Foundation.

The New America report, "Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms," found that U.S. manufacturers spend more than twice as much for health benefits than their foreign trading partners.

"At a time when our nation is thinking seriously about how to stabilize its fiscal future and fix… more

Len Nichols in MarketWatch | "Health-Care Costs Take Growing Toll on U.S. Employers"

Communications — Tue, 06 May 2008 14:05:00 -0400

New America in the News:

Full article

Len Nichols, a health economist at the New America Foundation, was giving a talk in the Midwest recently when an employer asked him a question that went something like this: I can fight health-care costs by moving jobs overseas, but then who’s going to be able to buy my middle-class goods? As jobs disappear, so does access to affordable health insurance in many cases, and consumers grappling with less income and unstable coverage rightly pinch their pennies.

Nichols recounted this Catch 22-like story in a conference call Tuesday as he detailed a new study from the foundation. It describes how high health-care costs are putting U.S. employers at a significant competitive disadvantage compared with the health-care burden shouldered by other industrialized nations. The problem will get worse unless financing for health coverage starts to shift away from the employer-based model, Nichols said.

Employers are financing the costs partly out of profits, he said. “Fundamentally, they’re looking for relief, and that helps explain why they’re demanding some kind of reform in a serious way from the federal government.”

To be sure, workers do pay part of their employers’ higher health-care costs in lower wages, but that’s more of a long-term phenomenon than many experts have appreciated, Nichols said. “If employers could push this into wages they would, but every single year health-care costs grow faster than productivity,” wages and general inflation. Raising prices isn’t an option because countries such as China and India offer lower-price goods.

He figured if employers bore no burden and health-care costs just came out of workers’ wages, then why would employers continue to move jobs offshore, reduce health benefits’ generosity and increase employee cost-sharing? . . .

Stealth Marketers

Ron Tang — Tue, 06 May 2008 07:11:00 -0400

A few weeks ago, devoted listeners of National Public Radio were treated to an episode of the award-winning radio series The Infinite Mind called "Prozac Nation: Revisited." The segment featured four prestigious medical experts discussing the controversial link between antidepressants and suicide. In their considered opinions, all four said that worries about the drugs have been overblown.

The radio show, which was broadcast nationwide and paid for in part by the John D. and Catherine T. MacArthur Foundation, had the air of quiet, authoritative credibility. Host Dr. Fred Goodwin, a former director of the National Institute of… more

Employer Health Costs In a Global Economy

Health Policy — Tue, 06 May 2008 06:29:00 -0400

Increasing Employer Health Costs, Lowering U.S. Competitiveness

Although most Americans get health insurance through their employers, business leaders are increasingly united in their belief that rising health care costs threaten America’s competitiveness in the global economy. Business support for comprehensive health reform has been growing as a result.

However, economists generally believe that it is workers -- rather than employers -- who pay for health care through lower wages. Although this proposition may hold true in the long run, employers face a variety of constraints that may make it difficult for them to fully shift health costs in the short run.… more