WisBusiness: Tommy says consumer awareness key to controlling health costs

By Brian E. Clark

MADISON – Health care costs that are increasing by 10 percent a year are putting a significant damper on economic recovery, former Gov. Tommy Thompson said Thursday night.

Speaking at the Greater Madison Chamber of Commerce annual dinner, the U.S. Health and Human Services secretary laid out what he described as a “market-driven plan” to control costs and deliver better care.

Thompson said the U.S. already spends $1.5 trillion a year on medical care, which consumes 15 percent of the gross national product.

Though he said the U.S. medical system is the best in the world and provides excellent treatment for most Americans, its expense makes employers reluctant to create new jobs.

“It is a drag on recovery,” said Thompson, who hinted not so subtly that he is frustrated heading the largest federal agency and will leave by January. “Everyone from labor and small businesses to corporations has a stake in transforming because something has to change,” he said.

For starters, Thompson urged his business audience to support “health care savings accounts” that would be tax deductible and allow consumers to pay for minor costs, while reserving insurance for major illnesses or injuries.

He rejected any move to a single-payer “one-size-fits-all” health care system such as Canada and most European countries use.

Still, he said U.S. consumers are now insulated from the true cost of health care, which has resulted in what he called “market distortions.”

If most consumers had to think the cost of medical care, they would shop around for better prices.

“HSAs, which are similar to IRAs (Individual Retirement Accounts) would lead to more choice and more choice leads to higher quality,” he said.

Thompson also said small businesses should lobby to be allowed to set up association health plans so they could negotiate better rates like their larger brethren are able to do.

Though U.S. medicine is advancing rapidly when it comes to treatments, he said most of the country’s medical information system remains stuck in the 1920s, using manila folders and poorly written prescriptions.

Thompson said the country needs to use 21st century electronic record systems, which he said would improve patient care and cut down deaths from medical mistakes.

He cited projections that health information technology could save $150 billion a year and allow for rapid transmission of needed information from one doctor to another and from hospital to hospital.

“Some of you sit on hospital boards,” he told the crowd. “Push them to adapt that technology.”

Finally, he said hundreds of billions of dollars more could be saved if Americans improved their health by increasing the amount they exercize, smoking less and changing their lifestyles.

He said 75 percent of the cost of health care goes for the treatment of chronic diseases such as diabetes, which are aggravated by cigarette-smoking and obesity.

“Get your employees behind improving their health,” pleaded Thompson, who said he has lost 15 pounds in recent years.

“And then bargain with your insurance to reduce your rates,” he said. “You can do it, it’s legal.”