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Solution Framework of Market Forces

CAHR:   Our Core Principles

We believe the healthcare crisis warrants decisive action to produce meaningful state and federal policy reforms by 2009. Working together, business government and consumers can forge solutions to build a stronger, healthier America. CAHR advocates market-based reforms to fix our nation's broken healthcare system based on the following five core principles.

Market-Based Healthcare System: Market forces are largely absent in today's healthcare system. As a result, healthcare costs are spiraling out of control rising from 7.2 percent of GDP in 1970 to 16.2 percent in 2005. This figure is expected to grow to 22 percent by 2015, which will negatively impact the competitiveness of U.S. businesses in the global marketplace and be detrimental to American workers. Policymakers should remove current obstacles and introduce more market mechanisms to fix the healthcare delivery system.

Markets require transparent information on cost and quality to work efficiently; today's healthcare system fails this requirement. Healthcare reform policies must provide consumers full access to simple, reliable and transparent information about costs and quality of care, underpinned by cost-effective technology such as transportable digital medical records and e-prescriptions. These reforms will create a vibrant healthcare system that drives better health outcomes and lower costs.

Universal Coverage with Individual Responsibility: Public policy has long mandated that care be provided when needed. We believe this policy should be balanced with a requirement that individuals carry health insurance regardless of their employment status. All Americans should have access to affordable quality healthcare services, with no exclusions for pre-existing conditions. The market should drive these policies with government, businesses and individuals sharing responsibility to ensure affordable healthcare coverage is achieved.

Financial Assistance for Low-Income Individuals: The market will work better if low-income participants are provided financial assistance to obtain coverage than if healthcare were provided as a free good. Providing financial assistance will enable all Americans to obtain the routine healthcare they need through traditional venues - physicians and clinics - instead of emergency rooms.

Healthier Behavior and Incentives: Since 50 to 70 percent of total healthcare costs are behavior driven, healthcare plans must be designed to drive healthy behavior - starting with prevention and wellness and incorporating full care management programs for those with chronic and acute conditions. Individuals and families should have strong personal financial incentives for adopting healthy behaviors.

Equal Tax Treatment: Individuals must be able to purchase healthcare in the same tax-advantaged way as business does today. Today healthcare premiums are tax deductible to business, but not to individuals - a policy that resulted from World War II-era wage and price controls and is now out of date. Policymakers should level the playing field and make individual healthcare expenses tax deductible - thereby enabling individual responsibility.