Washington area businesses will collaborate to try to contain soaring health care costs by studying ways to improve employees' health, encouraging training of new nurses and other health workers, and supporting laws to rein in malpractice awards, a group of local executives said yesterday.
The executives met at the Potomac Conference, an annual event held by the Greater Washington Board of Trade through which high-level executives try to use their clout to address the region's problems. Hospital executives, major employers, and others described a tough challenge in managing health insurance costs that are rising by double-digit percentages each year.
"Costs are going up 12 to 15 percent a year, and that comes straight out of the bottom line," said Charles Dalluge, managing principal of Leo A. Daly Co., a Washington-based architecture firm with 1,200 employees worldwide.
Spending on health care, which rose 14 percent in 2003 nationally according to the Kaiser Foundation, is being driven by broad economic and regulatory forces over which local executives have little control. But the executives argue that local hospitals, employers and nonprofit organizations can take steps to ease the burden locally, if only at the margins.
"You can't talk to a CEO without hearing them complain about the rate of increase in their health care cost," said George Vradenburg, a philanthropist and adviser to America Online who chaired yesterday's event. "There are a number of regional strategies that have been effective to reduce health care costs."
One of those, the executives said, is to offer programs through workplaces to encourage good health. Jodi Fuller, director of health and benefits for Dulles-based AOL, said that the firm has a prenatal education program that saved it money, because women who participated had fewer costly complications in delivering their babies.
"These sorts of programs may be available in the community, but a lot of these people are working 10 or 12 hours a day," Fuller said.
Another stress on the region's health care system, officials at the event said, is a shortage of nurses, radiologists, and other health care workers. At Washington Hospital Center, 52 percent of the hospital budget goes to payroll costs, and wages are rising rapidly because it is so difficult to find workers qualified to provide care, hospital president James Caldas said.
A health care task force created from yesterday's event will seek to copy programs in other cities that helped unemployed workers get training for health-related fields, Vradenburg said.
D.C. Mayor Anthony A. Williams (D) addressed the group and advocated reform of the District's medical malpractice laws, which do not cap damages against doctors or hospitals. Williams said that the city's laws drive up malpractice premiums and have prompted many doctors to relocate to the suburbs.
A report prepared by a Board of Trade committee found that the average payment for a malpractice verdict in the District in 2000 was $584,338, the highest in the nation and more than double the national average. The new health care task force will assist Williams in that push, Vradenburg said.