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Editorial: Comcast weighs in on health care

Welcome to the party. News that Comcast, the country’s largest cable company, is working on the urgent task of reining in runaway health care costs – and even succeeding – is encouraging to anyone who understands the ongoing threat to the nation’s economy as well as the health of its citizens.

Though working on its own, Comcast joins at least one other large-scale effort of the private sector to tame “the hungry tapeworm on the American economy.” That’s how investor Warren Buffett put it earlier this year as his company, Berkshire Hathaway, linked arms with Amazon and JPMorgan Chase to look for ways to control the metastasizing costs of health care, which are approaching 20 percent of gross domestic product. Buffett is chairman of Berkshire Hathaway and of The Buffalo News.

Comcast is already reaping rewards for its efforts, as the company’s health care costs over the past five years have risen only about 1 percent, notably less than the 3 percent average of other large employers and below the general rate of inflation. Even more revelatory of the company’s success is that other large companies are seeing annual cost increases of more than 10 percent. Plainly, it is doing something right.

Comcast is achieving this success not by driving workers into less expensive high-deductible plans that discourage doctor visits, a not-uncommon strategy by businesses struggling with health care costs. Instead, it is investing in strategies designed to help their employees “in making the right decisions for themselves and their families,” according to Shawn Leavitt, the executive overseeing benefits at Comcast.

It does that, in large part, by contracting with – and sometimes investing in – companies that provide “navigators” to help workers use their health benefits efficiently. It also works with insurers, but not as a source of innovation.

The company surely has an interest in controlling those costs. It spends about $1.3 billion a year on health care for its 225,000 employees and their families. Comcast’s size and resources offer opportunities that most other companies can’t match, but the strategy might still be replicated to varying extents and through cooperative ventures.

Also intriguing is the partnership announced in January by Berkshire Hathaway, Amazon and JPMorgan Chase, who are pursuing their effort “free from profit-making incentives and constraints.”

The project, at least initially, is meant for the benefit of these three businesses and their employees, but again, as it unfolds, replication may be possible. The effort is beginning with a focus on technology.

Meanwhile, insurers are pushing for a reimbursement structure that focuses on outcomes rather than the number of patient visits. CVS Health announced in December that it would buy the insurer Aetna. There’s a lot happening right now and it’s a hopeful sign, because the need is urgent.

Health care in 2017 accounted for 17.9 percent of gross domestic product, according to the Center for Medicare and Medicaid Services. By 2025, it is expected to reach 19.9 percent: One of every five dollars spent will be on health care. That’s unsustainable. When 20 percent of all dollars is spent on health care, money is drained away from other priorities, including housing, food, travel, defense, roads, bridges, sewers, the environment and more.

And it’s a drag on business, which became the primary source of health insurance only by accident. Employer-paid health coverage is a relic of World War II, when wage freezes and tax policy made pay raises impossible. To compensate, employers offered what, at the time, was inexpensive health insurance. Things have changed.

We can do better, because other developed countries – including Canada, Sweden and others – are doing better. They spend far less on health care per capita than the United States does. The United States, if it has the will, can do the same by finding its own path through innovation.

Big companies today are leading the work of innovating. Here’s hoping they succeed and that governments take note of the success.

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