Health care transformation: Crisis or opportunity?

When Thomas Donohue scans the American health-care landscape, he sees an opportunity. Despite the critics, regardless of the estimated 45 million in the nation without health-care coverage, no matter the annual double-digit cost increases, Donohue believes that — with hard work and some common business sense — a broad-based coalition can put health care on the path to positive change. We should no longer spend time worrying about what government is going to do about health care, says Donohue, president of the U.S. Chamber of Commerce, in a recent address before the Transforming American Healthcare National Symposium sponsored by the W. P. Carey School of Business. "It is time for us to decide that there are lots of things we can do as institutions, as businesses, as universities, as communities, that will improve the system."

Where others see crisis, the head of the U.S. Chamber of Commerce sees opportunity. When Thomas Donohue scans the American health-care landscape, he sees an opportunity — despite the critics, regardless of the estimated 45 million in the nation without health-care coverage, no matter the annual double-digit cost increases.

With hard work and some common business sense, Donohue believes that a broad-based coalition — not the federal government — can put health care on the path to positive change. We should no longer spend time worrying about what government is going to do about health care, said Donohue, the U.S. chamber's president and chief executive.

Donahue recently addressed the Transforming American Healthcare National Symposium sponsored by the W. P. Carey School of Business. "It is time for us to decide that there are lots of things we can do as institutions, as businesses, as universities, as communities, that will improve the system."

We can stop pointing at everybody else and start pointing at ourselves.

— Thomas Donohue, U.S. chamber's president and chief executive

First on the agenda, Donohue said, is to create a more transparent system that gives consumers a better idea of the real cost of their health care. That clear picture would include employee and employer contributions to the overall picture, not just a $15 co-pay. This will help give patients the information they need to navigate in a consumer-driven health-care system, one where the benefits of such things as Health Savings Accounts would be more obvious.

Already, an estimated 3 million people have signed up for these plans that allow workers to save tax-free dollars for health-care expenses. Donahue reported that the chamber is pushing to take these accounts to a new level, lobbying for legislation that would raise the limit on tax-free contributions, allow individuals to deduct premium costs, and provide tax rebates for small business owners who contribute to employee accounts. The chamber is also seeking new laws to give poor individuals a tax credit for participating. These changes are a necessary precursor to change, he added.

Next, he said, is to encourage the health-care system to use technology. "It is time that we begin to use technology at least the way teenagers are using it, to keep track of things going on," he says. Other industry sectors, including retail, shipping and banking have made the successful shift to electronic systems.

Reforming Medicare and Medicaid must include coming to grips with reimbursement rates that do not cover costs. Donohue argued that a fairer payment formula is needed to help fix what he called a troubled system. Reduce paperwork, he said, to one page, at least for basic cases. Then, sentence cheaters to five years in jail — no exceptions allowed. "Think of all the money you'd save," he says. "Think of all the transparencies we'd have. Think about how doctors could go back to practicing medicine.

Think about how the profession could discipline and manage its own affairs. I think it's an important idea." In addition, he said, the country needs to support an effort that would allow small and medium-sized business to join together across state lines to purchase health-care insurance. These cooperatives would have the same leverage and bargaining clout normally afforded to the big players in the industry, like unions, large companies and health-care plans, he argued.

Stumbling blocks like state mandates, frivolous lawsuits and government regulations are getting in the way, strangling any effort to transform the nation's health-care system, he added. For example, the chamber is fighting a Maryland law that forces companies with 10,000 workers or more to commit at least 8 percent of revenues to health care. With intense competition for high-quality workers, small businesses will probably have to contribute more than that to recruit and retain staff. Similar bills in more than a half-dozen states have been quashed, Donohue reported.

Also standing directly in the way of change, he said, are lawsuits that force doctors into defensive postures, ordering unneeded tests and medicines, and sometimes driving them from the profession because of medical malpractice insurance costs. The American Medical Association reports that 20 states have a health-care liability crisis that is prompting doctors to leave those states, stranding working families who need affordable health care.

He said such lawsuits can be a heavy hammer, crushing attempts at innovation. That is most evident in the development of new drugs. "We are becoming so risk averse in this country, so litigious that we're going to stop people from developing these miracle drugs for fear of being sued," he says. An example, he said, is the reluctance of companies to make drugs that would help ward off a bird flu pandemic.

Donohue advised those looking to government for solutions to examine the current situation: "We've got to resist the temptation to hand the controls of this system over to wonks and government people who have no real thought and concern about how people access this system to get the best return on it."

Donohue maintained that universal health care doesn't work — not in the United Kingdom, Canada or elsewhere. He believes that any such efforts should be shelved. "I'm not sure [health care] is a constitutional right," he said. Donahue added that that groups representing a broad range of interests must come together to change the American health-care system for the future.

There are scores of problems to worry about at the end of the day, Donohue says. But there is one thing everyone worries about sooner or later: "They all know they're going to get old, they all know that they're going to get sick and they all know they're going to die. And they want to do it with a sense of dignity, and with a sense of give-it-the-best-shot, and they want to do it with a sense of community. We have got to find a new paradigm to do this."

Donohue is optimistic that improvement is not that far away. "Winston Churchill knew more about Americans than Americans did," Donohue explains. "He always said that after Americans try everything else that doesn't work, and it's all wrong, they eventually get to the right thing by a process of elimination. I'm very hopeful that we will find it [a solution] soon."