Much debate but few solutions on health care

By David N. Taylor

and Jay Timmons

If you feel like the health-care debate has grown stale, know you're not alone. Despite the many presidential candidates vying to lead this nation, we are hearing little new on the topic. Vitriol and political discord continue to bar us from identifying solutions to control costs, fuel innovation, preserve the employer-based health-care system, and take care of workers and their families.

This matters to Pennsylvania, where health care is an issue not just for families but also for manufacturing. As a home to many pharmaceutical leaders and medical-technology innovators, the Keystone State is on the leading edge of medical manufacturing.

Manufacturers' continued growth and contribution to the local economy will require smart policies that help secure America's global leadership in these promising fields. And the future for all companies in the United States, including our diverse array of manufacturers, will depend on our ability to expand health-care options and reduce regulatory costs for companies and families alike.

The new administrative burdens, reporting requirements, and taxes imposed by the Affordable Care Act were poorly designed and, as a result, have been counterproductive. An additional 40 percent tax on employee benefits, known as the "Cadillac tax," continues to loom on the horizon four years from now and will add an expensive surcharge on family and individual benefits. And the medical-device tax, if not permanently repealed, could threaten manufacturers' ability to compete in a market worth $33 billion in exports each year.

Simply waiving these taxes for a year or two at a time will not provide the certainty and financial planning ability manufacturers and industry in general require. Our leaders need to stop settling for temporary fixes and come together to pass legislation that will reduce costs and increase flexibility over the long term.

New models for health-care coverage hold significant promise. Direct primary care alone has been shown to reduce costs by 20 percent. This allows employees and families to get health-care services for a small monthly, quarterly, or annual fee that employers could pay. Combining such a program with health savings accounts (HSAs), as well as high-deductible insurance for emergencies and major medical, could provide an affordable, comprehensive coverage package.

Additionally, hybrid ownership of health plans, private health-care exchanges, self-insured plans, flexible reimbursement arrangements, and strengthened HSAs should all be considered potential components of a 21st-century health-care toolbox. Policymakers should seek to enable forward-looking ideas, not add restriction after restriction, which can result in one-size-fits-all care.

These changes will only take us so far, however, if elected officials lack the courage to reform our medical liability system. Medical liability costs exceed $55 billion each year, draining money from our economy. Indirect impacts, such as the pressure to practice defensive medicine and order unnecessary tests and procedures simply to avoid lawsuits, drive costs and health-care premiums ever higher. Commonsense legal reform could have an immediate and significant impact.

Additional gains would come from modernizing the approval processes for medical devices, pharmaceuticals, and biologics. A streamlined system would reduce costs and speed up the delivery of safe, innovative treatments from the laboratory to the patient. It would also help ensure that the United States remains number one in medical science and manufacturing. A pro-investment tax environment and strong intellectual property protections would round out a policy agenda capable of driving research and development.

The National Association of Manufacturers has laid out this vision in greater detail in "Competing to Win," our road map for securing economic growth and the values that make America exceptional - free enterprise, competitiveness, individual liberty, and equal opportunity.

Now we are calling on manufacturers, workers, voters, and elected leaders to heed the call and transform health care for the benefit of our people, our economy, and our country.

David N. Taylor is president of the Pennsylvania Manufacturers' Association. taylor@pamanufacturers.org

Jay Timmons is president and CEO of the National Association of Manufacturers. jay.w.timmons@nam.org