U.S. Senator Kay Bailey Hutchison
When it comes to health care reform everyone can agree that Americans spend too much. Health care premiums for families have grown nearly eight times faster than wages and employers are increasingly forced to pass the costs of health care on to their workers.
The rising cost of health care threatens the competitiveness of businesses in Texas and across the country and places an added burden on families who are struggling to make ends meet. Furthermore our state and the federal government cannot indefinitely sustain the soaring cost of entitlement programs like Medicare and Medicaid which have helped ensure low-income and elderly Americans receive care.
The United States spends nearly $2.5 trillion on health care each year and that number is projected to top $3 trillion by 2012. Despite this spending too many Americans go without critical care because of rising costs and barriers to insurance coverage. In Texas alone there are millions of uninsured adults and children. Thus to bring meaningful reform to our health care system we must spend health care dollars more wisely to improve the value of care delivered.
One of the most promising new concepts in health care delivery is Value Based Insurance Design which offers the potential to simultaneously improve health care quality while reducing costs. Currently there is a one-size-fits-all approach to copayments and cost-sharing. Value Based Insurance Design instead embraces the simple yet transformative idea that cost barriers should be removed for high-value" prescriptions and treatments. A medicine or procedure is deemed high-value when evidence shows that we can maximize the health benefits to patients compared to dollars spent.
For example if you are a patient with diabetes taking insulin will help keep your blood sugar level stable so youre less likely to experience serious health complications. If you had a heart attack taking beta-blockers may ensure you dont end up in the hospital for treatment of more chest pains. And if you have asthma using an inhaler is likely to prevent a visit to the emergency room for an asthma attack.
Studies show that increasing copayments can prevent patients from taking high value medications for conditions such as heart disease asthma or diabetes. When patients forgo high-value medications or health care services they are more likely to suffer serious but often preventable complications or conditions that drive up health care costs. Correspondingly evidence has shown that reducing copayments for these critical high value prescription drugs results in more frequent use better health and cost savings.
A number of employers have shown the cost-effectiveness of reducing prescription drug copayments through a Value Based Insurance Design model. A notable example is Pitney Bowes which reduced copayments for asthma and diabetes medications for their employees. Because more employees took their medication regularly the company found that it saved more than a million dollars through reduced hospitalizations fewer emergency room visits and less need for expensive rescue" medications.
While many in the private sector have moved to adopt these strategies the federal government lags behind. That is why I am introducing legislation along with Senator Debbie Stabenow D-Mich. to create a demonstration project to test whether lowering copayments in Medicare can improve health and save money for both seniors and taxpayers. Eventually if proven we hope this solution will be broadly implemented for all Medicare beneficiaries. Leaders from across the political and business spectrum from Newt Gingrich to the National Business Coalition on Health support this concept.
Value Based Insurance Design has the power to truly bend the health care cost curve in the right direction. By taking practical steps to lower health care costs and improve health we can make insurance more affordable for all Americans.
Ultimately that is the single most important goal of health care reform.
U.S. Senator Kay Bailey Hutchison is the Senior Senator from Texas
