American College of Physicians: Internal Medicine — Doctors for Adults ®

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Should employers drive reform of the health care system?

From the July-August ACP Observer, copyright 2007 by the American College of Physicians.

In a May 21 editorial, Karen Davis, PhD, chair of the Commonwealth Fund, argues that "as the largest collective purchasers of health insurance, employers can and should drive the fundamental health system reform our country needs—and that Americans want." Noting that employers provide health insurance coverage to 160 million Americans—or almost two-thirds of the elderly population—she points to recent examples of where employers have "through collaboration" been able to streamline administrative costs, improve access and quality, and reform the health care payment system, creating a "win-win" for American employers—and their workers.

But can society really count on employers to redesign the health care system on their own? And if they did, would it truly be a better system?

Corporate and public values

One reason to question whether employers, by themselves, can drive fundamental health care reform is to consider the values that corporations bring to the discussion, and how those values may or may not be shared by the broader public.

The corporate value system is based on returns to stakeholders. Corporations need to make enough of a profit to assure a sufficient return on investment to shareholders. To the extent that health care costs are hurting profit margins, companies have an incentive to cut back on health benefits. Corporations, though, also have an interest in maintaining productive workers that do not lose unnecessary days off from work due to illness.

These values may lead companies to champion innovations that can achieve cost efficiencies while improving the care available to their employees. It also can lead companies to cut back on coverage or to impose a higher cost burden on employees, or to oppose health care reforms that would require that they pay more into the system. It is the latter image—think Wal-Mart—that has earned some American businesses a reputation (fairly or not) of putting corporate profits ahead of health coverage for their employees.

Since employers' values may not always be aligned with what many people consider to be the public's best interest, health care reforms driven solely by large companies are unlikely to have the popular support needed to be effective.

The value systems of large employers may also not be shared by the clinicians who deliver care to their employees. Physicians operate under a value system that assigns primacy to the needs of individual patients, not the third party that is paying their premiums.

Also, the idea that employers are "collective purchasers" of health insurance is true only to a point. The money employers spend on health care belongs to employees as part of their total compensation package. Employees may have different values, ideas and perspectives than their employers on how their money should be spent.

Finally, one can't leave the federal government out of the equation, both as the single largest purchaser of health care (recently overtaking the private sector) and as a body of elected officials who must answer to voters.

Physicians, employers, consumers

Rather than relying on employers to reform health care, a better approach is to create an alliance of physicians, consumers and employers to develop a shared vision of a better system.

This is the model being achieved by the Patient-Centered Primary Care Collaborative. The Collaborative, which was spearheaded by the ACP, the American Academy of Family Physicians and IBM, now includes representation from four physician organizations with a combined membership of over 333,000 primary care physicians and medical students, community health centers serving 16 million under-served Americans nationwide, coalitions of large employers and individual companies that collectively employ more than 50 million Americans, and several other leading health care advocacy and quality improvement organizations.

The members of the Collaborative agree that patients (employees) will benefit from care coordinated by a personal physician through a patient-centered medical home, supported by a better physician payment model that recognizes the value of such care.

In a statement to Congress released May 10, the members of the Collaborative agreed that "the patient-centered medical home will improve the health of patients and the health care delivery system. In order to accomplish our goal ... it is essential to support a better model of compensating physicians. Compensation under the patient-centered medical home model would incorporate enhanced access and communication, improve coordination of care, expand administrative and quality innovations and promote active patient and family involvement ... Further, the patient-centered medical home will improve the quality of care delivered and help control the unsustainable rising costs of health care for both individuals and plan-sponsors."

Translating vision into action

The Collaborative is putting those words into action by working hand-in-glove with the College in advocating for federal legislation, private and public sector demonstration projects, and other initiatives aimed at redesigning payment policies to recognize the value of care that is coordinated by a personal physician in a medical home.

Dr. Davis is right in arguing that employers must be among the drivers of health care reform, but they are unlikely to succeed without the support of their employees, and of the physicians who take care of them. Physicians represented by organizations like the ACP can also drive reform, but are unlikely to succeed without the support of patients and the companies who pay much of the health care bill. Consumers/patients have the most important stake in redesigning health care delivery, but they would benefit from the support and perspectives of those who purchase care on their behalf (employers and government), and those who deliver it (physicians and other health care professionals).

The Patient-Centered Primary Care Collaborative offers an exciting opportunity for diverse constituencies, each with distinct but complementary values, to join together to champion a shared vision of health care reform. It will use its collective clout to translate this vision into action by redesigning payment and benefit systems to support a better way of delivering health care—the patient-centered medical home—resulting in a true "win-win" outcome for patients, physicians, and employers.

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