All Eyes on Reform

Public support for health-care reform is high, but some CFOs take a different view.

Further fueling the anxiety about reform is the vast complexity embedded in competing plans. “Many people are worried about things that probably aren’t applicable to them,” says Nichols. “Nobody is talking about making most companies do anything different than they’re doing today. All of the proposed exchanges and new marketplaces are for people who don’t have coverage, and small firms that don’t have coverage.”

None of the plans that emerged from congressional committees proposed either a single-payer system, in which a government plan would overtake the current private system, or an employer mandate, in which firms would be required to offer health-care coverage for employees. Employers would not be obligated to offer insurance, but those above a certain employee or revenue level could face a per-employee fee if any of their workers required government subsidies to buy insurance on their own.

“Our understanding is that a firm our size that offers health care would not be significantly impacted or have to do anything differently,” says Marty Moore, CFO at SVP Worldwide, maker of Singer sewing machines. Refuting the idea that the option of a government plan would prompt employers to drop their own health-care coverage for employees, Moore says, “Whatever Congress concocts, we’re going to have to continue to offer a competitive policy. We see health care as an incredibly important recruitment and retention benefit.”

Still, Moore says he worries that expanding coverage to a broader base may cause inflation, as he anticipates a shortage of health-care professionals to provide treatment to the additional 30 million or more people who would be insured under the final remaining bills.

Others are skeptical that any of the surviving bills do enough to control costs. “If we are going to make a significant dent in the number of uninsured, the proposed reforms are not going to make enough of an impact on the cost,” says Michael Widmer, president of the Massachusetts Taxpayers Foundation and an active participant in that state’s 2006 health-care reform. “I think it’s going to cost some money. And the costs usually come up front, while any savings are often illusory or don’t come for some time.” Investments in medical technology or prevention campaigns, for example, can require substantial initial expenditures and may take years to show a return. Prevention programs may result in care not needed — a difficult savings to measure.

“Expenditures will go up because more people will be covered,” says Stephen Davidson, faculty director of the Health Care Management Research Center at the Boston University School of Management. “But there may be some countervailing cost savings.” With expanded coverage, more people will likely see their doctors for preventive or routine care, rather than relying on expensive emergency-room services. “Also, many young people are not covered [and tend to be] relatively healthy,” Davidson adds. “If they were in the risk pool, it would reduce per-capita costs.”

The nonpartisan Congressional Budget Office found that the reforms proposed in the Senate Finance Committee bill would reduce the deficit by $81 billion over 10 years. “There are some really good things in these bills,” says Dishman. “There are hints at payment reform. There are hints at delivery reform. There is discussion of care coordination.”


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