The real solution, in my view, is to eliminate employers altogether as the middlemen between health care providers and individual health care users. I recently figured that I could give each one of the 50 +/- employees for whom we currently offer insurance a $4,100 annual raise if I didn’t have to spend that money on their health insurance premium (this is just our 75% share, not the total cost of the premium). Granted, the $4200 alone would not purchase the same benefits they now have (for a family), but perhaps if insurance companies had to compete for their business in the same way they do for life auto & homeowner’s insurance, those prices would drop.

Legislators can help by allowing insurance companies to sell policies across state lines, and by dropping the self-insurance penalty now imbedded in the tax regulations (switch the write-off from companies to consumers), and by enacting tort reform to relieve doctors of some of the high cost of malpractice insurance, another factor that drives up health care costs. See the recent WSJ article about the number of doctors flocking to Texas for evidence of the best way to attract more primary care physicians to any location.

Ridding employers of the paternalistic, intrusive role of health insurance provider provides the best chance to decrease health care costs, and, even more importantly, improve the health of Americans by placing that responsiblity on their capable shoulders.

While a discount on health care insurance is no doubt a benefit, it completely fails to address the bigger problem of rising health care costs. For years we have depended on the insurance industry to manage one of our most significant costs, with dismal results. We have turned over to the insurance industry one of our most important business tools - the selection of what we want to purchase and how much we are willing to pay.

There is abundant data on which services we should value if we want lower cost and higher quality. By looking at the Medicare population researchers have found that the more primary care physicians there are per 10,000 enrollees the better the quality and the lower the cost. In fact what the studies show is that the higher the cost, the lower the quality.

As business leaders we are all aware of the costs benefits of quality, so this is no surprise. What is a surprise to me is that with this knowledge we continue to leave the purchasing decisions to insurance companies who have proven for 30 years that they cannot control cost or improve quality. We also pursue regulations and policies that prevent physicians from providing cost effective alternatives to our present broken system. This has to change and the change has to be led by those of us who are paying the bills, not by large public companies with primary responsibility to their shareholders and executives.

http://content.healthaffairs.org/cgi/content/full/hlthaff.w4.184v1/DC1