This is a critical time for the Affordable Care Act, the health care reform law passed by Congress last year. There is much at stake – for businesses, for consumers and for our economy. At the Bay Area Council, we believe the entire business community can and must play an active and vocal role in keeping cost control at the center of the health care reform bull’s-eye.
Rising health care costs continue to be a scourge on our economy, sapping resources and capital, and hampering our efforts to put the Great Recession behind us and start creating jobs. While the current economic malaise has reduced the rate at which costs are increasing, spending on health care nationwide continues to outpace the economy. Projecting from the latest figures from the California HealthCare Foundation, California health care spending has risen by 225 percent over the past two decades.
Spiraling health care costs also put California and the United States at a severe competitive disadvantage in the global economy, where U.S. manufacturers spend $2,726 more per worker annually on health benefits than our direct foreign competitors. Overall, our per capita spending on health care is double that of most other developed countries, but we don’t have healthier people or healthier communities to show for our investment.
Reducing health care costs is one of the main goals of health care reform. And yet, there are early signs that the detailed work of implementing the Affordable Care Act may be straying from the course of controlling costs through improving medical quality and effective care. One example is a bill that we believe will diminish the power of competition to reduce health care costs and provide consumers with affordable insurance.
Senate Bill 703, authored by Sen. Ed Hernandez, D-West Covina, would effectively remove 700,000 people from a competitive marketplace, the new California Health Benefit Exchange. It moves them instead into a government-run, Medi-Cal-type program. This has the potential to shift more costs to California businesses and to raise the cost of insurance premiums for middle class consumers who purchase their insurance through the exchange. So far, the bill has received little public attention. Whether or not the bill moves this year, these crucial decisions need to be on the radar screens of businesses and of those who want to see the health care reform succeed.
While not all businesses in California supported the Affordable Care Act, it now is the law of the land. We want it to work by having our California health system get dramatically more efficient at producing health care. The innovation in the tech sector that revolutionized communication can be similarly harnessed in the health sector. California business models, purchasing strategies, and medical and technological innovation are a critical component of the transformation of our system.
Passage of the Affordable Care Act was the first step. As hard as this is to believe given all of the political conflict it caused, passing the law may have been the easiest part. Now begins the hard work of implementing health care reform. The pace of implementation is only going to quicken over the next three years. Not getting on board now means abdicating any responsibility for the outcome. That’s why the Bay Area Council has and will continue to be engaged in this critical task of working toward a system with universal access to quality, affordable health care.
This piece originally appeared in the Sacramento Bee.