Experts agree: Business owners face higher health-care taxes

Business groups are largely adamant that they don't want to pay the price tags attached to any of the three health-reform packages winding their way through Congress.

But health-industry experts told participants in a forum organized by the Reno-Sparks Chamber of Commerce last week that inaction also carries a potentially hefty price tag.

They cautioned that the current health care system in the United States is failing, and the crisis is beginning to cascade at an ever-increasing speed.

"It is risky to stay where we are today," said Shelly Schlenker, vice president of public policy and advocacy for Catholic Healthcare West, the parent of Saint Mary's. "The status quo is not sustainable."

Many of the system's current problems stem from the refusal of federal and state lawmakers to pay health-care providers the full cost of treatment for Medicare and Medicaid patients, said Jim Miller, president and chief executive officer of Renown Health.

Unable to recover the costs of treating Medicare and Medicaid patients, the health-care industry increasingly has shifted those costs to patients with private insurance.

That, in turn, forced insurance costs up. Employers faced with double-digit increases in health benefit costs either cut back coverage or eliminated health benefits entirely. And to complete the cycle, that created more uninsured consumers who rely on high-cost health alternatives such as emergency rooms for routine care.

Schlenker, Miller and other industry experts who spoke to more than 300 participants in the Reno-Sparks Chamber forum expressed varying degrees of skepticism about the ability of Congressional proposals to deal with the roots of the nation's health-care woes.

But they said higher taxes for business are a certainty no matter what details are included in the bill that's sent to the desk of President Obama for his signature.

"It's clear that employers are going to pay," Miller said.

How much?

That's uncertain and changes almost daily, said Mike Bosma, a certified public accountant in Reno who follows the tax issue closely.

A better approach, Bosma said, is for business owners and managers to stay focused on the broad outlines and proposed requirements in health-reform bills.

"If there are things that really rub you wrong, squawk to your lawmakers," Bosma said.

Katie Hays, who works as a health lobbyist for the U.S. Chamber of Commerce, said recent polls appear to show waning support for reform measures.

Part of the reason for falling support, she said, may be concern about the cost of measures, which have been estimated at $1.6 trillion over the next 10 years for a plan that's before the House of Representatives.

Dave Racer, a Minnesota author who follows the health care industry closely, said any legislation still faces a variety of potential deal-breakers. They range, he said, from the inclusion of coverage for abortions to opposition to the so-called "public option" in coverage to concerns about the price tag and taxes associated with a reform package.

Plus, Racer said, none of the reforms address what he believes are the key question: The need for increased involvement by consumers in their own health coverage.

As recently as 1965, Racer said, about 43 percent of all medical bills were paid out of pocket by consumers. Today, the number is closer to 12 percent.

That, he said, leaves consumers with the mistaken impression that medical care is free or nearly free and doesn't discipline their use of services.

Effective reform also will require that consumers take greater control of their own health, Racer said. He said about 70 percent of health-care costs are related to lifestyle smoking, obesity, lack of exercise. Putting it another way, Miller said about half of U.S. health spending is devoted to 5 percent of the population.

Miller said a host of other factors have pushed health-care costs upward much faster than the rate of inflation in recent years.

Physicians worried about lawsuits practice defensive medicine, ordering up additional tests as protection. Tort reform, Miller said, will need to be a cornerstone of a long-term fix of the health system, but it's not addressed in the current proposals.

Shortages of doctors, nurses and other medical professionals, meanwhile, means their salaries are rising, Miller said. (Nursing pay was climbing at 8 percent a year, although the increases are beginning to moderate with the economic downturn.) And the pressure will rise substantially if currently uninsured people are brought into the system under a federal reform package.

That means that a long-term fix of the system also will require focused efforts to educate more doctors and nurses, Miller said.

"We've got to address the core issues," the Renown executive said.

Schlenker said Catholic Healthcare West believes that a focus on measured quality of care, including decisions about treatments that work best, also will be important to the future of the health-care industry.

"As you improve quality, you reduce costs," she said.