How Corporate Executives View Rising Health Care Cost and the Role of Government
With the events of past year, how we view health care in the United States is changing. The COVID pandemic has made even more clear the problems with our current system, including high costs, incomplete coverage, limited access to care, under-investment in public health, and serious racial and ethnic inequities. All of this, occurring against a backdrop of ever-rising health care costs, is causing many to re-think their priorities and positions on key health care policy issues.
In addition, the recent election has changed the political landscape and extended the range of policy options that likely will be discussed at the national level. During his campaign, President Biden proposed new coverage options that would broaden access to public coverage. One would create a Medicare-like public health coverage option that some people could elect in lieu of their current coverage. Another would lower the age of eligibility for Medicare to age 60. In addition, there appears to be bipartisan support for strengthening antitrust enforcement and limiting anti-competitive actions that are used by some health care entities to gain market power and increase prices, including proposals that would regulate or cap prices for high-cost drugs. Each of these proposals interject an expanded public role in providing coverage and restraining costs for populations that are largely now served by private health plans. Since these proposals are controversial and likely to face opposition from large parts of the health care industry, it is important to assess the level of support among key stakeholders.
Large employers are a primary source of private coverage, and thus are important stakeholders who will be influential in policy debates. Their views on health policy issues, however, are largely unknown. Many assume that business leaders tend to favor market solutions and oppose government involvement, but this is untested. Our objective was to find out what business leaders felt about health care issues – especially cost and coverage – and their opinions about potential government actions to address these problems.
To better understand how large employers may react to these and similar proposals, the Purchaser (formerly “Pacific”) Business Group on Health (PBGH) and the Kaiser Family Foundation (KFF) surveyed executive decision-makers at over 300 large private employers about how they view the costs of health care and health coverage and the potential advantages and disadvantages of increasing the government’s role in providing health coverage and reducing costs. The interviews were conducted in December 2020 and January 2021 by Beresford Research. The research project was supported by a grant from the Gary and Mary West Health Institute.
At a high level, we found significant concerns regarding health care costs. A significant majority of responding large employers “moderately” (49%), considerably (28%), or “strongly” (6%) agreed that the cost of health benefits is excessive. Employers did not blame any single cause for excessive costs, with large shares agreeing that the cost of prescription drugs, provider market consolidation and increased market power, volume-based payments, and unhealthy behaviors each are “moderate” or “considerable” or “very large” factors for high costs.
In addition, we found a significant amount of agreement with the need for greater government roles in providing coverage and addressing health care costs. A majority of responding large employers expressed some level of agreement with policy changes that would create a public option for employees and lower the Medicare eligibility age, both for their own employees and for the public more generally. Equally interesting, only small shares expressed disagreement with these ideas.
Majorities of responding large employers also expressed agreement with the need for more government involvement in containing health care costs. Interventions including capping hospital prices in non-competitive markets, limiting out-of-network charges, and negotiating or limiting drug prices in certain cases all had majority support. There was considerable support for pursuing policies that would increase transparency of prices and costs and that would increase antitrust enforcement or otherwise address non-competitive conduct. Overall, large shares of respondents agreed that a greater role for the government in providing coverage and containing health care costs would better for their business (83%) and better for their employees (86%).