Intel Executive Vents About Washington Health Care Debate

June 16, 2008
A prominent business leader expressed frustration with the focus and pace of health care reform deliberations in Washington on Monday, June 16, at an event designed to prepare a foundation for congressional action next year.

Craig Barrett, chairman and CEO of Intel Corp., asserted that the discussion was tending toward the “lowest common denominator,” which he defined as “availability” of health care.

At a roundtable, Barrett said that not enough attention is being paid to reducing costs.

“It’s going to be an economic disincentive to doing business in the United States,” Barrett said of the rising health care bill. “Something ought to be done to make the system more efficient and, frankly, that dialogue is not taking place.”

Barrett spoke at a breakout session of a larger event hosted by the Senate Finance Committee, “Prepare for Launch: Health Reform Summit.” The committee’s chairman, Sen. Max Baucus, D-Montana, and the highest ranking Republican, Sen. Charles Grassley of Iowa, brought together bipartisan members of Congress, health care providers, business officials and policy experts for the daylong conference.

Participants outlined issues that Congress will have to tackle next year in what could be the most serious attempt at broad health care reform since 1994, when a Clinton administration proposal was killed on Capitol Hill.

Barrett criticized Congress for failing over the last couple years to introduce technology in the delivery of health care, which he argued would lower costs and improve quality.

For instance, he said that the government policies should encourage electronic prescriptions and remote diagnoses. He decried the fact that doctors are only reimbursed for face-to-face visits, which undermines the need for a health information technology infrastructure.

“There is no database backbone to the system,” Barrett said.

Sen. John Kerry, D-Massachusetts and one of the hosts of the session, said an e-prescribing provision of a Medicare reform bill still has to be worked out.

“We had resistance in certain quarters, and we had to fight back against that,” Kerry said.

Overcoming political obstacles to health care reform was one of the themes of the summit. Grassley stressed that Congress and interest groups must listen to each other and compromise.

“It is so easy to kill legislation in Congress,” Grassley said. “It is extremely difficult, as you have seen, to pass legislation.”

Even with an earnest Congress taking advantage of the momentum of a new presidential administration next year, health care is an issue prone to political gridlock.

Nonetheless, statistics illustrate the need for action. Health care spending consumes more than 15 percent of U.S. economic output and is estimated to account for half of all federal spending by 2050. Companies also foot a huge bill. Intel spends about $10,000 to $12,000 per employee, according to Barrett.

Improving access and quality and reducing costs may have to be done incrementally, according to Federal Reserve Chairman Ben Bernanke, one of the summit’s keynote speakers.

“Because our health care system is so complex, the challenges so diverse and our knowledge so incomplete, we should not expect a single set of reforms to address all concerns,” Bernanke said. “Rather, an eclectic approach will probably be needed. In particular, we may need to first address the problems that seem more easily managed rather than waiting for a solution that will address all problems at once.”

Bernanke stressed that the health care sector is too slow to widely adopt proven low-cost treatments, like using aspirin and beta blockers for heart attack victims.

“The best way to reduce the fiscal burdens of health care is to deliver cost-effective health care throughout the system,” Bernanke said.

No matter how health care is reformed, businesses should remain key players in the system, Barrett said. Currently, about 160 million Americans receive coverage from their employers.

Companies have the purchasing power to reduce costs, Barrett said. “If you remove that agent of change, the employers, then change will slow down, not speed up,” he said.

He also dismissed proposals that would eliminate the tax exemption for the cost of health insurance. Proponents argue that it would free up money to reform the system.

But Barrett says that the companies would still pay for health care because they would have to raise salaries so workers could afford to buy insurance on their own.

“It’s a de facto tax increase on our cost of doing business,” Barrett said. Health care coverage is “going to come from someone. It’s going to come from us [employers]. It’s not free.”

On the same panel, Paul Fronstin, a senior research associate at the Employee Benefit Research Institute, said that health care is a potent recruiting and retention tool.

“Employers we’ve talked to say it would be insane to drop benefits,” Fronstin said.

Now it’s up to Baucus, Grassley and other Capitol Hill leaders to take all the advice and come up with a plan.

Baucus designed the bipartisan summit as a model for cooperation in 2009. “This is all teamwork,” he said. “I hope that it sets the tone for more of us working together.”

—Mark Schoeff Jr.