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AIM Launches Employers’ Campaign for Affordable Health

Posted on April 19, 2011

Associated Industries of Massachusetts today launched its largest issue campaign in two decades in a bid to end the crisis of spiraling health insurance rates for employers and citizens.

Employers Campaign for Affordable HealthThe Employers’ Campaign for Affordable Health will ensure that lawmakers, employers, doctors, hospitals and insurers seize what may be their best opportunity to restructure the financial underpinnings of the commonwealth’s health care system. The initiative will include lobbying, grass-roots organizing and public information, along with educational programs designed to prepare employers for the difficult decisions they will have to make as part of the process of controlling their health premiums.

The theme of the initiative is “Be Part of the Change.”

The campaign marks the largest single project undertaken by AIM and its thousands of member employers since the organization led the reform of the workers compensation system in 1991. The close parallels between the workers compensation reform and the current health insurance crisis provide hope that the same business/government coalition that worked together to lower workers comp rates by 60 percent at the start of the Weld administration can do the same with health care at the dawn of the second Patrick administration.

Why a separate campaign now? The answer is simple – change is in the air and employers simply cannot wait any longer for relief.

Massachusetts employers have watched with growing frustration during the past two decades as health care expenditures have outrun wages, consumer prices and per-capita Gross Domestic Product. Total health spending in a commonwealth widely acknowledged as being a world center of medical care rose from $20 billion in 1991 to approximately $68 billion last year. That number is projected to double to $123 billion by 2020 without intervention to control costs.

The Massachusetts Division of Health Care Finance and Policy estimates that health care in Massachusetts will cost $16,000 per citizen per year by 2018, 23 percent more than the national average. Meanwhile, the Massachusetts economy lost a net 92,000 jobs during the past decade as total non-farm payrolls dropped from 3.285 million in 2001 to 3.193 million in December of 2010.

AIM surveyed its 6,000 member employers last fall and a staggering 97 percent cited the cost of health insurance as their primary concern. Small employers, in particular, have faced health premium increases of up to 40 percent during the past two years while simultaneously struggling to regain their footing in a tentative economic recovery.

Beneath the numbers are wrenching stories of employers whose commitment to do the right thing and provide health insurance for workers now ironically threatens the long-term financial stability of their companies.

 “Premium increases absolutely affect our company, but my biggest concern is for our employees,” wrote one employer.

“Year after year we offer them plan choices with reduced coverages/high deductibles/high co-pays with an expectation of reduced premiums, yet the opposite happens. The cost of health insurance is out of control. As an HR person I’m upset by this and I think I have a better understanding of the entire process. I can’t even imagine how our employees feel.”

But the Employers’ Campaign for Affordable Health is about hope, not despair.

AIM strongly believes that a political consensus has formed in Massachusetts around the need to reduce and manage the cost of health care for consumers and employers. Virtually everyone – from business and political leaders to cities and towns being forced to borrow money to pay health premiums – agrees that the Massachusetts health care market is unsustainable and that the time is now for fundamental changes to the way companies and consumers purchase medical services.

Prominent policymakers now support the idea of reducing health insurance premiums by encouraging a shift from the current fee-for-service system of paying medical providers to a “global payment” system that encourages doctors and hospitals to form integrated networks, and rewards them for good patient outcomes and preventative care. AIM looks forward to working with all parties in the debate to make this system a reality.

In January, Blue Cross Blue Shield of Massachusetts Chief Executive Andrew Dreyfus urged hospitals to accept global payments and warned that providers who hold onto traditional fee-for-service arrangements face level or reduced payments. Dreyfus told hospitals: “Health care costs are making businesses in Massachusetts less competitive, and limiting their ability to grow. Health care costs are squeezing municipal budgets, taking money from schools and police and fire protection, and health care costs are consuming too much of family incomes, forcing many families to make difficult sacrifices.”

Beacon Hill lawmakers are debating proposals filed by AIM and others that would allow financially strapped cities and towns to negotiate the design of health insurance plans outside of collective bargaining. And Massachusetts employers are migrating to new tiered network health insurance plans that limit premium increases by encouraging customers to seek quality care in less expensive settings than they do now.

Massachusetts has a unique opportunity and responsibility to solve the health cost puzzle. The commonwealth became a model for the nation in 2006 when it undertook a bipartisan health reform that has since extended coverage to 400,000 people who did not have coverage previously. With the rest of country only now taking its first, halting steps toward expansion of coverage, it’s time for Massachusetts to establish a model for making world-class health care measurable and affordable for employers and consumers alike.

The process is complex and will require involvement from everyone. Employers must become more knowledgeable insurance buyers. Consumers must develop the same acumen for comparing medical services that they use to purchase automobiles. Doctors and hospitals must look in the mirror and address the staggering price differentials among practitioners and institutions within Massachusetts. And all providers of health care and services must minimize the share of premium dollars they spend on administration.

The time is now. And the Employers’ Campaign for Affordable Health is committed to making it happen.

The campaign will move into high gear on May 13 when the AIM Annual Meeting hosts a discussion among some of the nation’s foremost health care experts on the challenges of controlling health costs. In late May and early June, AIM will conduct a series of seven seminars  entitled “What’s Your Health Care Solution?” that will help employers understand what drives health costs and how to control premiums

Please keep up with the campaign at our online health cost resource page. We welcome your ideas and comments.