De parvis, grandis acervus erit
To my brother M. BR. WHITNEY.
Althoughe thy store bee small, for to beginne,
Yet guide it well, and soone it is increaste,
For mightie men, in time theire wealthe did winne,
Whoe had at firste, as little as the leste:
Where GOD dothe blesse, in time aboundance springes,
And heapes are made, of manie little thinges.
Rising health costs push total employment costs up and wages and benefits down. The result is lost profits and lost wages, in addition to pointless risk, insecurity and a flood of personal bankruptcies.
Sustained growth thus requires successful health-care reform. Barack Obama and John McCain propose to lead us in opposite directions -- and the Obama direction is far superior.
Sen. Obama's proposal will modernize our current system of employer- and government-provided health care, keeping what works well, and making the investments now that will lead to a more efficient medical system. He does this in five ways:
- Learning. One-third of medical costs go for services at best ineffective and at worst harmful. Fifty billion dollars will jump-start the long-overdue information revolution in health care to identify the best providers, treatments and patient management strategies.
- Rewarding. Doctors and hospitals today are paid for performing procedures, not for helping patients. Insurers make money by dumping sick patients, not by keeping people healthy. Mr. Obama proposes to base Medicare and Medicaid reimbursements to hospitals and doctors on patient outcomes (lower cholesterol readings, made and kept follow-up appointments) in a coordinated effort to focus the entire payment system around better health, not just more care.
- Pooling. The Obama plan would give individuals and small firms the option of joining large insurance pools. With large patient pools, a few people incurring high medical costs will not topple the entire system, so insurers would no longer need to waste time, money and resources weeding out the healthy from the sick, and businesses and individuals would no longer have to subject themselves to that costly and stressful process.
- Preventing. In today's health-care market, less than one dollar in 25 goes for prevention, even though preventive services -- regular screenings and healthy lifestyle information -- are among the most cost-effective medical services around. Guaranteeing access to preventive services will improve health and in many cases save money.
- Covering. Controlling long-run health-care costs requires removing the hidden expenses of the uninsured. The reforms described above will lower premiums by $2,500 for the typical family, allowing millions previously priced out of the market to afford insurance.
In addition, tax credits for those still unable to afford private coverage, and the option to buy in to the federal government's benefits system, will ensure that all individuals have access to an affordable, portable alternative at a price they can afford.
Given the current inefficiencies in our system, the impact of the Obama plan will be profound. Besides the $2,500 savings in medical costs for the typical family, according to our research annual business-sector costs will fall by about $140 billion. Our figures suggest that decreasing employer costs by this amount will result in the expansion of employer-provided health insurance to 10 million previously uninsured people.
We know these savings are attainable: other countries have them today. We spend 40% more than other countries such as Canada and Switzeraland on health care -- nearly $1 trillion -- but our health outcomes are no better.