[Congressional Record Volume 148, Number 108 (Thursday, August 1, 2002)]
[Senate]
[Pages S7903-S7904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself and Ms. Collins):
  S. 2835. A bill to promote the development of health care 
cooperatives that will help businesses to pool the health care 
purchasing power of employers, and for other purposes; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. FEINGOLD. Mr. President, I rise today with my colleague from 
Maine to introduce legislation to help businesses form group-purchasing 
cooperatives to obtain enhanced benefits, to reduce health care rates, 
and to improve quality for their employees' health care.
  High health care costs are burdening businesses and employees across 
the Nation. These costs are digging into profits and preventing access 
to affordable health care. Too many patients feel trapped by the 
system, with decisions about their health dictated by costs rather than 
by what they need.
  This year has been the third year in a row of double-digit increases 
in health care costs. Companies will likely face average increases of 
12 to 15 percent in 2003, on top of the 12.7 percent increase this 
year.
  For some employers in Wisconsin, costs will rise much more sharply. A 
recent study found health care cost for businesses in southeastern 
Wisconsin were 55 percent higher than the Midwest average. While 
nationwide, the average health care premium for a family currently 
costs about $588 per month, in Wisconsin an average family pays $812 
per month.
  We must curb these rapidly-increasing health care premiums. I 
strongly support initiatives to ensure that everyone has access to 
health care. It is crucial that we support successful local initiatives 
to reduce health care premiums and to improve the quality of employees; 
health care.
  By using group purchasing to obtain rate discounts, some employers 
have been able to reduce the cost of health care premiums for their 
employees. According to the National Business Coalition on Health, 
there are more than 90 employer-led coalitions across the United States 
that collectively purchase health care. Through these pools, businesses 
are able to proactively challenge high costs and inefficient delivery 
of health care and share information on quality. These coalitions 
represent over 7,000 employers and approximately 34 million employees 
nation-wide.
  Improving the quality of health care will also lower the cost of 
care. By investing in the delivery of quality health car, we will be 
able to lower long term health care costs. Effective care, such as 
quality preventive services, can reduce overall health care 
expenditures. Health purchasing coalitions help promote these services 
and act as an employer forum for networking and education on health 
care cost containment strategies. They can help foster a dialogue with 
health care providers, insurers, and local HMOs.
  Health care markets are local. Problems with cost, quality, and 
access to healthcare are felt most intensely in the local markets. 
Health care coalitions can function best when they are formed and 
implemented locally.
  Local employers of large and small businesses have formed health care 
coalitions to track health care trends, create a demand for quality and 
safety, and encourage group purchasing.
  In Wisconsin, there have been various successful initiatives that 
have formed health care purchasing cooperatives to improve quality of 
care and to reduce cost. For example, the Employer Health Care Alliance 
Cooperative, an employer-owned and employer-directed not-for-profit 
cooperative, has developed a network of health care providers in Dane 
County and 12 surrounding counties on behalf of its 170 member 
employers. Through this pooling effort, employers are able to obtain 
affordable, high-quality health care for their 110,000 employees and 
dependents.
  This legislation seeks to build on successful local initiatives, such 
as The Alliance, that help businesses to join together to increase 
access to affordable and high-quality health care.
  The Promoting Health Care Purchasing Cooperatives Act would authorize 
grants to a group of businesses so that they could form group-
purchasing cooperatives to obtain enhanced benefits, reduce health care 
rates, and improve quality.
  This legislation offers two separate grant programs to help different 
types of businesses pool their resources and bargaining power. Both 
programs would aid businesses to form cooperatives. The first program 
would help large businesses that sponsor their own health plans, while 
the second program would help small businesses that purchase their 
health insurance.
  My bill would enable larger businesses to form cost-effective 
cooperatives that could offer quality health care through several ways. 
First, they could obtain health services through pooled purchasing from 
physicians, hospitals, home health agencies, and

[[Page S7904]]

others. By pooling their experience and interests, employers involved 
in a coalition could better attack the essential issues, such as rising 
health insurance rates and the lack of comparable health care quality 
data. They would be able to share information regarding the quality of 
these services and to partner with these health care providers to meet 
the needs of their employees.
  For smaller businesses that purchase their health insurance, the 
formation of cooperatives would allow them to buy health insurance at 
lower prices through pooled purchasing. Also, the communication within 
these cooperatives would provide employees of small businesses with 
better information about the health care options that are available to 
them. Finally, coalitions would serve to promote quality improvements 
by facilitating partnerships between their group and the health care 
providers.
  By working together, the group could develop better quality insurance 
plans and negotiate better rates.
  Past health purchasing pool initiatives have focused only on cost and 
have tried to be all things for all people. My legislation creates an 
incentive to join the pool by giving grants to a group of similar 
businesses to form group-purchasing cooperatives. The pool are also 
given flexibility to find innovative ways to lower costs, such as 
enhancing benefits, for example, more preventive care, and improving 
quality. Finally, the cooperative structure is a proven model, which 
creates an incentive for businesses to remain in the pool because they 
will be invested in the organization.
  We must reform health care in America and give employers and 
employees more options. This legislation, by providing for the 
formation of cost-effective coalitions that will also improve the 
quality of care, contributes to this essential reform process. I urge 
my colleagues to join me in cosponsoring this proposal to improve the 
quality and ease the costs of health care.
                                 ______