NBGH: Milliman Study Highlights Need For Payment Reform in Public, Private Programs

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Phil Blando
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(Washington, DC) -- Helen Darling, President of the National Business Group on Health (NBGH), released the following statement on a Milliman study released today finding that low Medicare and Medicaid reimbursements to hospitals and physicians lead to higher health insurance costs for consumers and employers. The NBGH represents more than 300 large employers, including 63 of the Fortune 100, providing health benefits to more than 50 million Americans:

"The Milliman study released today shines a much-needed spotlight on a key health care challenge facing the new Administration and 111th Congress: reforming provider payments in both private plans and Medicare and Medicaid to ensure adequate payment for effective and efficient care only. At a time of scarce resources, it is critical that policymakers take action to help structure a system that pays for value, not just volume.

"While a genuine concern, the Medicare and Medicaid cost shift is just one part of a broader challenge. According to Milliman, Medicare and Medicaid underpayments to providers add a staggering 10 percent to the average premium for a family of four, with employers paying nearly three-quarters of the additional cost. With our nation in the grips of a deep recession, America's large employers are working hard to compete in a global marketplace and maintain high-quality health care coverage for workers and dependents. Medicare and Medicaid underpayments to providers are a hidden $90 billion drag on our economy. Worse still, the costs associated with poor quality and inefficient care are much greater - some data suggest as much as one-third of the $2.4 trillion our nation spends on health care.

"Much more needs to be done. Ending the Medicare and Medicaid cost shift would be a marked improvement, but that only yields a certain level of savings and improvements. With the new Administration and Congress looking to make national health reform a top priority, we believe strongly that the time is now for dramatic payment reform, with a system where all payors contribute their fair share for an efficient, effective, and safe health care system."

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The National Business Group on Health is the nation's only non-profit, membership organization of large employers devoted exclusively to finding innovative and forward-thinking solutions to their most important health care and related benefits issues. The NBGH identifies and shares best practices in health benefits, disability, health and productivity, related paid time off and work/life balance issues. NBGH members provide health coverage for more than 50 million U.S. workers, retirees and their families. For more information about the NBGH, visit www.businessgrouphealth.org