Business Roundtable edges away from health reform plan
By: Jeanne Cummings
December 11, 2009 06:26 PM EST
Without fundamental changes to the current health reform plans, the White House and congressional Democrats risk losing the last major corporate group that is standing by their effort: The Business Roundtable.
In an interview with POLITICO on Friday, Roundtable President John Castellani raised concerns about the effectiveness of cost containment provisions in the proposal, and the timing of various fees and taxes that ultimately could be passed on to employers that provide insurance to workers.
“If these areas aren’t improved the reform effort will not work and we need something that works,” said Castellani.
Castellani wouldn’t say how long the group is giving Democrats to fix the bill, but said, “We are going to be much louder and much more insistent on improving” the legislation.
Castellani’s comments are significant because the White House, including President Barack Obama <http://topics.politico.com/index.cfm/topic/BarackObama> , has often contrasted the Roundtable’s cooperative role with that of the U.S. Chamber of Commerce, which is lobbying hard against the plan.
The Roundtable has 161 CEO members who oversee the largest corporations in America. Combined they have nearly $6 trillion in revenues and more than 12 million employees. They alone provide health care to more than 35 million workers and their families, which makes them one of the biggest stakeholders in the current debate.
By staying at the table, the Roundtable has lent credibility to arguments by congressional Democrats and the White House that the reform measure will not dramatically disrupt the private sector, or bring an end to employer-sponsored insurance programs.
In addition, the Roundtable’s mostly quiet engagement has given some cover to lower profile, but still influential, business trade associations who have also decided to not to fight the reform legislation.
The Roundtable’s hardening position came after a board meeting held in Washington this week. While the group discussed other legislative issues, “we kept coming back to this every time we had a chance. It consumed the preponderance of the day,” Castellani said.
No threats were made, he said, but it’s clear that the CEOs see the time coming when they may need to shift to a more aggressive position – either for or against the measure.
If the Roundtable becomes a hostile player, the White House and Congress could face a relentless wave of big-name CEOs on television panning the measure and, potentially, the mobilization of millions of workers against it.
“What our members decided is that they want us to continue to make this bill better. We will defer passing judgment on it, but it is not good enough” today, he said.
Senate Democrats and the White House sought to downplay the potential rift. “We are working through these issues with them and they are being very constructive,” said one White House official.
A senior Senate aide, likewise, noted that a package of amendments drafted by Sen. Mark Warner (D-Va.) and about a dozen other freshmen addressing some of the Roundtable’s concerns is already on the table.
Castellani applauded that measure, but outlined a list of desired changes that goes well beyond it.
Among the changes sought by the Roundtable regarding cost containment are:
• Access to data collected by the Centers for Medicare and Medicaid Services that can be used to identify cost-effective treatments, efficient hospitals and best performing physicians, which could help businesses develop more efficient and effective private insurance packages for their employees.
“Right now that data sits there and nobody has access to it,” said Castellani. “You know more about the cost and quality of a flat screen TV than you do about heart-bypass surgery.”
• An expansion of the authority of the proposed Independent Medicare Advisory Board so that it can search for cost savings in all health care sectors. The current legislation exempts some groups from scrutiny, including hospitals. In addition, the board should be charged to search for efficiency measures in the private sector that can replicated in the Medicare system.
• An acceleration and expansion of pilot programs aimed at changing the way Medicare reimburses doctors and hospitals by providing bundled payments to cover patient testing and consultations rather than paying for each service delivered, which critics say leads to unnecessary treatment.
All of those changes are aimed at driving Medicare costs down and ensuring that any proposed savings from that system aren’t simply shifted and extracted from private insurance policies holders.
Among the revisions the Roundtable will press for on the financing side of the reform measure, are:
• An exemption for self-insuring employers from a tax imposed on all insurance providers. The levy emerged at the 11th hour in the Senate deliberations. Castellani said some senators called to apologize “for the surprise.” The Roundtable argues that it should be exempt because corporations already are facing a tax on the so-called Cadillac insurance packages they may offer – and are already doing the right thing by offering insurance to their workers.
• An adjustment or bridge that would ease the cost squeeze caused by the timing of new fees and insurance reforms and the onset of new customers.
As written now, health insurers will be required to begin providing insurance without regard to previous health conditions as soon as the legislation is enacted.
In order to afford to do that, the industry needs revenue from the millions of new customers – many of them young and healthy -- that the legislation will drive their way.
However, Roundtable members worry that the penalty for not buying insurance is so slight that many healthy people won’t get insurance.
The proposed reform measure includes a sliding scale of fees – ranging from $95 for those who don’t buy insurance in 2014 to $750 in 2016.
Consequently, health insurers are likely to pass on the costs of treating any sicker new customers on to businesses that provide private insurance to their workers.
A similar lag between the influx of new customers and a new insurance product tax could prompt another shift of costs to the business sector, Castellani said.
He is urging senators to, among other things, require individuals to buy catastrophic insurance immediately.
In the interview, Castellani said the work by the Senate and the White House on these issues will drive the Roundtable’s ultimate decision on whether to endorse the measure or not.
Asked when the Roundtable may make its final assessment, Castellani demurred. “At some point we will either know that these objectives can’t be met or can be met,” he said, “and at that point we’ll make a decision.”
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