Health Coverage Could End, Says NAM Head

By Steven Brostoff, Washington Editor

NU Online News Service, Sept. 4, 4:22 p.m. EST, Washington?Unless quality and productivity in healthcare are improved, manufacturers will be forced to eliminate health insurance benefits for employees, the president of the nation's largest manufacturers' association said.

"No issue is more critical to manufacturers than the rising cost of healthcare," Jerry Jasinowski, president of the Washington-based National Association of Manufacturers, said at a press briefing.

Healthcare spending now accounts for 14 percent of the nation's Gross Domestic Product, Mr. Jasinowski said, which is twice as much as the amount spent on computers and information processing.

Left unabated, projections are that healthcare spending could reach 20 percent of GDP by the end of the decade.

"Healthcare spending in America is out-of-control," Mr. Jasinowski said.

One of the primary factors causing the price increase is lack of productivity in the healthcare sector, he said.

Mr. Jasinowski cited one study which said that as much as one-third of healthcare spending is for services that are unnecessary, out-of-date and detrimental to patients.

"There is redundancy and waste in the system," he said.

He also cited a recent Institute of Medicine report which said that some 100,000 people die each year due to medical errors.

Manufacturers, Mr. Jasinowski said, must absorb at least some of the resulting costs if they are to continue to provide health coverage to their employees.

In addition, James Maxwell, director of health policy and management research for Boston-based John Snow Inc., said that an aging population and the increasing introduction of medical technology are also responsible for healthcare inflation.

In particular, Mr. Maxwell said, new technology, including new pharmaceuticals, creates a dilemma. While new technology sometimes leads to better health, he said, it is also very expensive.

To deal with healthcare cost inflation, NAM has outlined a seven-point program aimed at addressing healthcare cost inflation.

One of the major tools suggested by NAM to reduce costs is a new federal healthcare education program.

Only the federal government, NAM says, has the resources and reach necessary to disseminate necessary consumer information on health care quality. This information does exist, NAM notes, citing the Washington-based National Committee for Quality Assurance as one source.

However, NAM says, small businesses in particular are disadvantaged when it comes to purchasing health insurance and they need information about the available healthcare quality tools.

NAM is proposing that the Department of Health and Human Services establish a clearinghouse for information about the quality of healthcare being delivered by various providers.

"What the manufacturing sector and all of business needs desperately is a comprehensive mechanism whereby the quality of healthcare options can be measured and evaluated, and the NAM believes that a public and private sector partnership could well provide it," Mr. Jasinowski said.

In addition, NAM is calling for increased employee participation in wellness and disease management programs, collaboration among manufacturers, hospitals and physician groups to reduce medical errors, financial incentives to encourage employees to chose health services in a cost-effective manner and legislative restraint on health care mandates.

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Health Coverage Could End, Says NAM Head

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