Employment-Based Health Insurance: A Prominent Past, but Does it Have a Future?

Transcript

ANDREW STERN: What is at stake? Well, we have the best health care system in America. It seems to me we have to make a series of very fundamental changes. This is not a matter of policy. If we could solve this health care system by policy, it would have been solved every single year. There is more good policy about health care in America than I can imagine. It is the most studied and researched. We have commissions and committees, publicly and privately, all through Washington and the United States.

It is really about politics and leadership. The first question and the first point I would make is let's just stop studying the problems and think about what are the politics and the leadership we need to solve them because there are plenty of smart people who, given the opportunity, can solve the health care crisis in America. If you don't believe it, just take a trip around the world. Everybody else has been smart enough to figure it out. I am sure we could learn something.

Our choice is we can keep making incremental changes in the health care system. I love the discussions about let's solve the problem, disease by disease. Pick your favorite disease, and let's have the government solve that problem. I totally appreciate the desire to solve this interest group or constituency by constituency. Let's do the 55 pluses this year and the children next year. I appreciate every provider would like us to solve the nursing home or the hospital or the rehab crisis. That is all fair. I certainly appreciate that everybody would like to build a better funding stream for the health care system.

But the truth is, we are way past incremental change. It is not going to work. As the Institute of Medicine says and I think it applies here, your trying harder will not work; it is changing systems of care. Well, I think the same thing is true about our health care system. It is not just trying harder. It is not just making incremental changes. It is actually changing the system of health care, so that is designed to deal with all the other economic realities. You can't apply a 20th Century health care system to a 21st Century economy.

The fundamental change for me means, one, we have to recognize that employer-based health care is ending. It is dying in front of our very eyes. The charts say it there. It will not rebound I believe in the next economic upturn in America. It was a good friend. It served America well in the 20th Century. We love it dearly. Employers, to their credit, lived with it for a long time, despite all of the distortions that it has created, but it is collapsing in front of our eyes. It may still be breathing, but anybody who can look into the future says this employer-based health care system is over in America. If we don't say that, we are just going to keep building on a very unstable foundation that is not really appropriate.

. . . As someone I talk to a lot from the Boston Consulting Group says successful organizations are ones that leap into the future and hope the world catches up with where they are. We keep trying to catch up to this health care system, and we really need to make a bet farther into the future and then have the system catch up with us.

We have to get rid of the employer-based health care system. It is not going to work. For employers, there is a good reason why it won't work. By 2008, according to McKenzie, employers will spend more on health care than they will make in profit. That is just not sustainable.

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