Corporate Leaders Are Getting Bullish On Government Action On Health Care Costs

A shorter version of this column has been published by Axios.

In an apparent break with the past, a surprising share of corporate leaders are now willing to support government efforts to tame health spending. Historically Republican-leaning and weary of government, only a tiny share oppose regulation. The test of how serious they are will be whether they lend their support to legislation in Congress or state legislatures to tame health and drug costs.

That’s one takeaway from a new survey of over 300 large private employers with 5,000 employees or more we conducted at KFF with the Purchaser Business Group on Health, supported by the West Health Institute. Notably, we surveyed corporate leaders, not benefits officers, including forty CEO’s.

+ What’s motivating the change: 87% of the corporate officers we surveyed in big companies said they believed the cost of health benefits will become unsustainable over the next 5-10 years, and 85% said there was a need for a greater government role on costs and providing coverage.

+ 78% expressed some level of support for government action on hospital prices where there is limited competition. And perhaps more significantly coming from what has always been an anti-regulatory crowd, less than five percent opposed it. Similar numbers supported and opposed government limits on drug prices.

+ 65% expressed some level of support for a public option for their own workers while again, similarly small numbers opposed the idea. There was similar support for lowering the age of Medicare eligibility as well.

Corporate leaders surveyed say they will continue to pursue value-based payment, raise cost sharing, and do all the things they have been doing to try to control their health costs. But they don’t have the market clout to do much about health costs on their own. The returns from the payment and delivery reforms which have recently been in vogue have been modest for them. They saw the highly touted Amazon, Berkshire Hathaway, JP Morgan Chase health cost initiative collapse.

The back story: corporate America appears to be more progressive than it was in the days when it was led by manufacturing and banking giants, with leaders like Walter Wriston at Citibank and Lee Iacocca at Chrysler speaking out about health costs but almost never supporting regulation. It is now led by tech and consumer industries who, pushed by shareholders and sometimes more progressive CEO’s, are taking on causes like voting rights. More of its leaders are comfortable with government action to solve problems.

As the nation comes out of the pandemic health spending is also starting to rise again. Employers may soon forget the heroic actions of local hospitals when high prices hit their bottom lines. Some are also learning that many of their local hospitals did just fine during the pandemic, aided by government relief checks.

Yes but: corporate America has talked a big game about health costs for decades and consistently failed to support legislation that would address it. Corporate leaders are on hospital boards, know the top doctors where they live and can sometimes be persuaded that policies aimed at reducing costs will compromise the medical institutions they care about.

Congress does listen to CEO’s. If they add their weight to legislative debates about health costs and drug prices, it could make a real difference and they seem more inclined to do it.