Paying for What Works

Released by: CALPIRG Education Fund

Executive Summary

Our health care system is in crisis. Interrelated problems with the affordability and quality of care are undermining patient care and threatening the economic future of American families and small businesses.

The total premium cost for employer-sponsored family health insurance has doubled in less than ten years,   and may double again by 2016.  In the face of high-cost premiums, both large employers and small businesses face tough choices: shoulder greater costs and potentially harm their competitiveness, pass on large increases on to employees who aren’t equipped to pay them, or reduce coverage. In many cases, employers are covering less of employees’ premiums and requiring increased deductibles.   Employee health care costs for small businesses, which lack the buying power of larger firms, are 18% higher than for bigger companies. 

Americans might accept these rising costs if their health care dollars were purchasing quality care on which they could depend.  Instead, today’s health care system is undermining family physicians’ and other primary care providers’ ability to provide quality, personalized care to American families. These cost and quality challenges are both rooted in the way our system pays for and delivers health care. The same incentives which are driving up costs are undermining health professionals’ ability to provide the best care.

Over the first few months of 2009, these twin crises of cost and quality have helped generate an unprecedented breadth of support for reform. Senators and Representatives from across the political spectrum have echoed President Obama’s statement that “health care reform cannot wait, it must not wait, and it will not wait another year.”   Very difficult political arguments remain to be resolved around the role of the public sector, employers and private insurance in comprehensive legislation.  Yet a remarkable consensus is emerging on the broad policy strokes needed to fix the incentive structure in America’s health care payment and delivery systems. 


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