Déjà Vu All Over Again: Rising Health Insurance Premiums And Implications For The Public And Private Sector

Opening Presentation at the Premium Briefing
Capitol Hill, Washington, DC
May 5, 2000
Henry E. Simmons, M.D., M.P.H., F.A.C.P.
President, National Coalition on Health Care

Good morning. I am Dr. Henry E. Simmons, President of the National Coalition on Health Care, the nation’s largest and most broadly representative alliance working to achieve the reforms necessary to heal our ailing health care system.

A description of our Coalition, and the principles we support, as well as a list of our studies, members and prominent individual supporters is in your packet. We are non partisan and Presidents’ Carter, Ford, and Bush honor us as Co-chairs. Our working Co-chairs are former Republican Governor Bob Ray of Iowa, who served as chairman of HEW’s rural health advisory committee and as a member of the Presidents healthcare quality commission, and former Democratic Congressman Paul Rogers of Florida, who for a decade served as Chairman of the health subcommittee of Energy and Commerce.

On behalf of our Coalition, I want to welcome you to this policy briefing on the crisis facing us in health care costs.

We believe that the evidence we will review today establishes the fact that contrary to conventional wisdom health care costs are not under control and will not be controlled by present policies. In fact, health insurance premiums are now rising faster than ever in our history and as a result our already serious uninsured and underinsured problem will grow far worse.

Those most directly and adversely affected will be Americas working middle class families, the self insured and our millions of small businesses, i.e. the bulk of our citizenry.

In addition, as costs increase and as coverage falls, our already serious quality problem will grow worse because needed care will become unaffordable and unavailable to many.

We have then a disturbing set of interrelated forces at work. As costs rise, coverage falls. As coverage falls, quality suffers because necessary care becomes unaffordable. Poor quality, in turn, is a major contributor to cost increases, and the cycle is repeated. We have inadvertently created a perpetual motion machine headed in the wrong direction.

For all these reasons, we believe it is time to reinsert the cost issue back into the national health care debate, and to examine the set of health system reforms, which will be necessary to address our three inter-related problems; i.e. rising costs, decreasing coverage and poor quality. It now seems abundantly clear that existing and proposed policies, partial reforms and managed care alone will not solve these problems.

Our session today is timely because the cost issue has been relatively ignored of late as we focused instead on the problems of quality and the uninsured. In the meantime, the cost issue has received far less attention because it was assumed by many that managed care and the market had successfully addressed this problem.

Our paper was developed and this session was organized in order to allow us to examine the validity of this assumption and to catalog the impact of recent and future cost trends on consumers and employers and on the problems of coverage and quality.

We believe that the evidence shows that though health care cost increases were temporarily slowed through the one time move to managed care, costs and the underlying cost drivers were never really contained, they were to a larger extent postponed and we are now seeing the impact of what turned out to be a limited and inadequate strategy.

Our first speaker Mr. Joel Miller, Director of Policy for the Coalition will lay out the evidence for the conclusions we have reached.

His findings will then be discussed by three distinguished analysts:

¨ Professor Ken Thorpe of Emory University

¨ Dr. Van Doorn Ooms, Senior Vice President and Director of Research for the Committee for Economic Development

¨ Professor Mark Goldberg, Distinguished Faculty Fellow at the Yale School of Management

Following their comments we will open the floor to your comments and questions.