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Employers must exert leverage

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LAS VEGAS--Employers must lead the effort to revamp the U.S. health care system because they have the leverage needed to force major changes, said Craig Barrett, chairman of the board of Intel Corp.

Health care is basically a fee-for-service system rather than a pay-for-performance system, Mr. Barrett told attendees at America's Health Insurance Plans' annual meeting in Las Vegas late last month.

"The system is not going to change itself," he said. "Someone has to change it and that's the people who are buying the services."

The Santa Clara, Calif.-based microchip, computing and computer products maker pays $600 million to $700 million in annual health care costs, a figure projected to grow to $1 billion by the end of the decade, Mr. Barrett said.

Employers have taken only small steps to address health care costs such as creating onsite clinics, having employees participate in health risk assessments and limiting copayments for employees with chronic illnesses to make sure they take their medications, he said.

"We have been AWOL," said Mr. Barrett, a featured speaker at the AHIP gathering. "We have been at most marginally involved."

As payers for health care services, employers have great leverage in demanding changes from a health care system that does not want change, he said. Employers need to band together and use their purchasing power to demand change or take their business elsewhere.

"We need disruption," Mr. Barrett said. "We need a paradigm shift."

Another payer of health care services, the federal government, has a great deal of leverage but is unlikely to change the system because government-led initiatives are slow and too many different constituencies are lobbying the government, he said.

The current political debate is focusing on who pays for health care services and how to insure the millions of U.S. residents who have no health insurance.

"The who-pays debate is interesting, but not productive," Mr. Barrett said. "It's hard for me to imagine that requiring insurance for everyone is going to solve the problem."

Instead, the debate should focus on how to make the system more effective by providing higher quality care and lowering costs, particularly for chronic conditions that drive the bulk of expenses, he said.

Efficiencies can be found through using existing technology, which has helped other countries to streamline delivery of health care services and in other industries to improve customer service, Mr. Barrett said. The health care industry needs to understand the importance of investing heavily in technology, he said.

"The technology is there to solve all these problems," Mr. Barrett said. "The challenge is we haven't put the incentives in place to use them."

One critical initiative would ensure that all physicians are able to electronically prescribe medications to their patients, he said. Most doctors operate small practices and have been resistant because it costs about $15,000 to equip each physician with the technology. Other industries, though, also have small practitioners who have been able to afford the investment in technology, so the cost argument is merely an "excuse," Mr. Barrett said.

Another key change would allow patients to search the Web for physicians who provide the best quality of care and outcomes, he said. "In every other aspect of your life, you can do that, except for (health care)," Mr. Barrett said.