PRESS RELEASE
November 27, 2006

Contacts: Stephen Kroes, Utah Foundation Executive Director
(801) 355-1400, ext. 5
(801) 573-8824 (mobile)

Elizabeth Escandon, Utah Foundation Research Analyst
(801) 355-1400, ext. 6
(801) 472-4053 (mobile)

Robin Riggs, Vice President, Salt Lake Chamber
(801) 328-5080

Aaron Bludworth, Vice President, Modern Display
(801) 831-7114 (mobile)

Printable Version

UTAH FOUNDATION ANALYZES FIVE HEALTHCARE REFORM CONCEPTS

Utah Foundation today released its November report examining five healthcare reform concepts suggested by the Employers Healthcare Coalition, a group formed by members of the Salt Lake Chamber. This is part two of a two-part report; the first examined rising healthcare costs and the reasons for high cost growth, and this second report analyzes five reform ideas selected by the coalition after reviewing the findings from part one.

The current report, entitled "Controlling Healthcare Costs, Part Two: Analysis of Five Reform Concepts," is attached to this release. It is also available, along with part one, online at www.utahfoundation.org.

The five reforms examined are:

1. Promoting wider use of best-practice guidelines to reduce costs and increase quality
2. Tort reform to reduce malpractice insurance costs and the costs of "defensive medicine"
3. Reducing state mandates to make insurance policies more affordable
4. Promoting healthier lifestyles through wellness programs and incentives
5. Enacting tax credits to make insurance more affordable

This report is not an endorsement by Utah Foundation of these reforms ideas but an attempt to analyze the current situation in Utah, options for implementing these concepts, trends and developments in state or national policies related to each reform, and experience with similar policies in other states or nationally. By understanding more about these reforms, the Employers Healthcare Coalition can decide which options it desires to pursue with policymakers.

Highlights of this report include the following:

• The use of best practice guidelines in medicine can reduce overutilization of healthcare while improving quality. A shield from malpractice liability for those who adhere to guidelines could promote wider adoption of best practices.
• Tort reforms, including stricter limits on noneconomic damage awards, have been shown to reduce medical costs and improve the supply of physicians in national studies.
• A “no-fault” compensation system for medical injuries could provide compensation to a wider group of injured patients for about the same cost as the current tort system.
• State benefit mandates increase the cost of commercially purchased health insurance and can lead to fewer individuals being covered.
• Stronger financial incentives for employers to provide wellness programs and for individuals to live healthy lifestyles could reduce the growing costs of obesity, smoking, and other unhealthy lifestyle choices.
• Employer tax credits can make provision of health insurance more affordable and promote greater coverage in group plans. A modest credit is estimated to cost $38 to $88 million, depending on the types of firms to qualify.

Steve Kroes, Utah Foundation Executive Director said, "This report provides a great amount of detail on how these reforms have been implemented or attempted in other states and a number of options to consider for changing public policies in Utah. It is good to see the business community willing to tackle such complicated problems, and we hope this research has been helpful in informing their decisions on what may be feasible and worth pursuing."

Robin Riggs, Vice President of the Salt Lake Chamber said, "A number of Chamber members formed the Employers Healthcare Coalition to study rising costs and to take action on controlling healthcare inflation. We think the five reforms examined here all hold the promise of reducing cost growth, and we are committed to pursuing action on these concepts through the legislative process."

Aaron Bludworth, Vice President of Modern Display and Chairman of the Salt Lake Chamber’s Healthcare Committee said, "The unique approach of this project allowed a wide variety of organizations to be involved in constructive dialogue on healthcare reform. Rather than simply blaming others for our healthcare problems, we are taking positive steps to find solutions and make a difference in making healthcare more affordable for Utahns."

Utah Foundation is a public policy research group that promotes a thriving economy, a well-prepared workforce, and a high quality of life for Utahns through research and practical, well-reasoned recommendations for policy change.