As we approach the end of the year, businesses are facing a 10-year high in health care costs. While rising prices affect all Americans, the small business community will feel the brunt of the blow. Congress should push the proposed legislation past the mark, and employers should explore alternative health care options to help ease the financial strain.
America’s health care system is in dire need of transparency, choice, and competition. Changes associated with the Affordable Care Act strangled doctors, hospitals and employers with government red tape. The resulting regulatory landscape has limited patient choice and significantly increased costs for middle-class families and small businesses.
A survey conducted earlier this year found that 98 percent of small employers that provide health insurance to employees are concerned about rising costs that will make offering benefits unsustainable in the next five to 10 years. Not only could employer-sponsored health insurance disappear for millions of small business employees, but rising costs also drain resources that could otherwise be invested in upgrading facilities, paying employees, and creating and expanding jobs.
While a broad simplification of the health care system that prioritizes the doctor-patient relationship is needed to fully address the problem, the current political realities in Washington make that nearly impossible. Instead, entrepreneurs should focus on nurturing free-market solutions while policymakers adopt complementary, incremental reforms that enjoy bipartisan support.
Even in the current divided political environment, these goals are achievable.
As families and small businesses drown in high health care costs with plans that seem to offer little coverage, entrepreneurial doctors have created an alternative route to access affordable medical services that put patients back in control. This is called direct primary care.
Patients at these practices pay a modest monthly fee for access to regular checkups, telemedicine, and routine procedures that operate outside the traditional healthcare mafia. And instead of being slaves to paperwork and insurance companies, direct primary care physicians are able to form strong relationships with their patients.
As health care costs continue to rise, small businesses that currently provide health benefits should explore these types of options for their employees. That way, the small business community can access medical services ranging from high-quality primary care to catastrophic coverage at a fraction of the cost. Although it is now a boutique industry, growing market demand will attract more doctors to the arena.
Meanwhile, on Capitol Hill, lawmakers are preparing to tackle rising prescription drug prices — a trend that is costing companies and families big time. Policymakers are trying to bring transparency and accountability to the drug supply chain to curb prescription drug prices that have risen nearly 90 percent over the past decade.
Much of the problem is due to middlemen in the drug supply chain called Pharmacy Benefit Managers (PBMs). These entities were originally created to control costs, but increasingly took advantage of government loopholes and consolidated. Now PBMs can game the system and absorb billions of dollars a year from the pharmaceutical market at the expense of small businesses and their employees.
Federal policymakers are rightly considering several pieces of bipartisan legislation that would help shine a light on middleman behavior and lower costs.
For example, the OTHER Act would strip PBMs of incentives to steer patients toward more expensive drugs by adjusting reimbursement structures to a flat fee rather than a percentage of the price. The PBM Abuse Protection Act follows a similar strategy, while encouraging transparency and accountability. And other policy proposals take significant steps toward providing discounts for drug manufacturers to patients at the pharmacy counter as financial savings.
The current trajectory of healthcare costs is unsustainable for small businesses. While overhauling the system is politically unfeasible, raising direct primary care options and tackling intermediary schemes in tandem is the next best alternative as we approach 2024.
Elaine Parker is the president of the Job Creators Network Foundation, which manages HealthcareForYou.com policy reform framework.
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