Health Reform WK-EDGE suite executives increasingly open to expanded government role in reducing health care costs, experts say
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Monday, May 17, 2021

suite executives increasingly open to expanded government role in reducing health care costs, experts say

By Lauren Bikoff, MLS

Top business executives at large companies around the U.S. are increasingly open to proposals that would expand government roles in reducing health care costs.

According to recent research from the Kaiser Family Foundation and the Purchaser Business Group on Health (PBGH), at a recent webinar analyzing the survey findings, several experts indicated that openness to expanding governmental role is not because executives believe that the government operates programs more effectively than the public sector, but instead is due to a long-standing frustration with the health care system, high annual cost increases, and little transparency.

"To put it frankly, employers are just currently getting a raw deal when it comes to health spending," said Timothy A. Lash, chief strategy officer and executive vice president at West Health. "They are paying much higher prices for health care goods and services than the public plans. By 2040, employers are expected to spend some $2 trillion on health care annually.

Survey findings. The KFF and PBGH survey included responses from 302 employers with at least 5,000 employees. Respondents were "c-suite" executives, such as chief executive officers, chief financial officers, chief operational officers, chief human resource officers, or people directly reporting to those positions.

The survey found that executives overwhelmingly believe that a greater government role in providing coverage and containing costs would be better for their business (83 percent) and better for their employees (86 percent). Respondents who said that a greater government role might be better for their business or their employees were asked why they thought so; among those who believed it would be better for their business, 43 percent said that it could reduce employee premium costs and 42 percent said that it could reduce costs for employers.

Companies were asked about their support for specific government policies. Large shares of respondents agreed that policymakers should pursue policies that would strengthen anti-trust enforcement and prohibit anti-competitive conduct by providers, pharmaceutical manufacturers, and health plans (92 percent) or improve the transparency of prices and the total cost of care (90 percent). Although less well supported, 56 percent of respondents thought policymakers should pursue policies to reduce barriers to the development and use of generic drugs and biosimilar products.

Many respondents also expressed support for more direct government intervention in health care pricing in certain circumstances. More than one-third of respondents "somewhat" or "strongly" agreed with government policies that would cap prices for hospitals in markets with limited or no competition; limit prices charged by out-of-network providers in surprise billing situations, and negotiate prices for high-cost drugs or setting limits on drug price increases. Fewer than 5 percent of respondents expressed any disagreement with any of these potential interventions.

Political landscape. After discussing the survey findings, the webinar panelists discussed the likelihood of congressional action on controlling health care costs.

According to Chris Jennings, founder and president of Jennings Policy Strategies, "As for the issues on Capitol Hill, [members of Congress] are driven, frankly, by the public’s frustration with health care, particularly cost and complexity, and the overall issue of affordability, so they are very much interested in responding. And that is showing up across the board, among Independents, Republicans, and Democrats."

Lanhee Chen, the David and Diane Steffy Fellow in American Public Policy Studies at the Hoover Institute, believes the likely course of action will be legislation dealing with prescription drug costs. "I do think there will be significant amount of public interest in trying to get something done on health care costs. And I think the most likely place for that to happen will be around the prescription drugs space," he said. "I think there is an appetite amongst both Democrats and Republicans to act there. So, I certainly do see the potential and the possibility for there to be bipartisan action."

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