<nobr>Jan 21, 2004</nobr>

Employers Call for Greater Health Care System Reforms to Expand Access, Lower Costs

For Immediate Release:



Washington, DC, - Responding to remarks relating to health policy issues in the State of the Union Address, The ERISA Industry Committee (ERIC) today applauded the President’s emphasis on strengthening the private health care system by reducing health care costs, expanding coverage for the uninsured, and creating opportunities for small employer group purchasing. Nevertheless, ERIC expressed the concern of major employers that the fundamental causes of high health care costs and eroding coverage need to be addressed.

“Unless providers have the tools they need to improve quality and reduce avoidable errors and waste, and unless patients have the tools they need to choose their doctors, hospitals and treatments based on comparative price and performance, health care coverage will not be economically sustainable regardless of government subsidies,” warned Mark Ugoretz, president of The ERISA Industry Committee.

“Our health care system now consumes nearly 15 percent of our economy, and it is devouring employer budgets, family budgets, state budgets and the federal budget. The President’s initiatives seek to offer important short-term relief, and we urge greater emphasis on long-term solutions,” Ugoretz continued.

ERIC has identified two areas in particular where systemic change is needed:

First, the Nation’s health care system is technology rich but information management is poor. With isolated exceptions, the health care system lacks basic health information systems, including electronic medical records, prescribing and disease reporting systems that are needed to reduce avoidable medical errors, redundant tests and unnecessary hospitalizations that cost Americans billions of dollars every year. “Much of our health case system still runs on paper, with all the inefficiency and human error that entails” Ugoretz observed. “As a result, our health care system is great at generating costs and consuming valuable resources, but lousy at coordinating care, measuring performance and improving quality over time, or giving consumers value for their money.”

Second, patients consume health care in a price-opaque and performance-blind marketplace. Due to the lack of publicly-disclosed comparative price and performance data, it is nearly impossible for most patients to make a fully-informed decision about the best place to receive treatment at the best price, and it is equally difficult for most health plans to reward health care providers for superior clinical performance and efficiency. “Without significantly improved accountability for cost and clinical performance, our dysfunctional health care system will continue to make our economy less globally competitive,” Ugoretz lamented.

Ugoretz said that ERIC and its member companies look forward to working with Congress and the Administration on long-term solutions that will re-engineer the health care system.

To arrange an interview with Mark Ugoretz or Anthony Knettel, Vice President, Health Affairs, please contact Doug Baj at (202) 789-1400 or dbaj@eric.org.

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