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In the Nation's Interest

Choice and Competition in Healthcare

When the President presented his framework for health-care reform to a joint session of Congress in September, he emphatically stated, "My guiding principle is, and always has been, that consumers do better when there is choice and competition." We agree with this two-part focus.

The health reform proposal headed for upcoming Senate debate stops far short of the twin goals of choice and competition. It would restrict each of an estimated 200 million Americans to the specific health insurance package provided by his or her employer, which in the vast majority of cases allows no meaningful consumer choice. Indeed, for the typical American, health insurance "competition" would continue to be limited to multi-year re-bidding of the employer's specific plan. Limiting competition to the employer's one-size-fits-all health plan has perpetuated the fee-for-service system that has pushed costs unsustainably higher.

This system must be transformed now. Only through competition in which the employee chooses the package that meets his or her family needs - whether the employer's or another plan - will we achieve universal coverage at affordable cost.

All responsible corporations and all human resource executives seek to provide the best possible health care for their employees. However, with all of the will in the world, it is impossible for any employer to provide optimal coverage for each member of a diverse group of employees with just one plan. If those employees had choice among competing health-care insurers and plans, and could personally benefit from any savings from choosing less expensive plans, insurers and providers would be forced by the market to provide innovation and more cost-effective care - and while employees saved on their premiums, employers would be more competitive globally.

Furthermore, if each employer chooses its own unique plan, coverage cannot be portable. Our dynamic, mobile workforce can have portable coverage only if there is individual employee choice.

The Free Choice Amendment from Senate Finance Committee member Ron Wyden (D-OR) would break free from the one-size-fits-all employer approach. It would not require employers to offer coverage, but would ensure that employers who do provide coverage offer choices among competing plans. Those not getting choice through their employers would have access to the exchanges, where coverage would be portable. This approach embodies the President's stated goals of choice and competition. The individual employee's cost-conscious choice under the Wyden Amendment will make most Americans active participants in improving healthcare plans and service delivery. Even the best-designed one-size-fits-all employer plans do not do this.

Health care is a make-or-break issue for our entire economy and society. The business community must work together to harness the traditional American values of competition and choice to solve this crucial problem.