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November 25, 2002

Council: To ease health costs, New York should pursue '10 percent solution'

To combat skyrocketing health-care costs, New York State should embrace a bold new approach to containing these costs: a government-wide effort to reduce costs of both health-care and health insurance by 10 percent, The Council has urged Governor George Pataki.

"The staggering rise in [health-care] costs nationwide threatens New York State's continuing economic progress," Business Council President Daniel B. Walsh wrote in a Nov. 18 letter to Governor Pataki.

"It has far-reaching implications for private-sector employment, and for state and local tax burdens. With employees absorbing a share of recent increases, it is steadily becoming a major checkbook issue for millions of workers."

New York has worked harder than most states to improve its health-care system in recent years, Walsh wrote, "but the results have been disappointing to us." He noted that billions of extra health-care dollars injected into New York's system in recent years had not lowered employers' costs, significantly improve the quality of care, or substantially improved the number of uninsured.

Antonio Novello, commissioner of the state Department of Health, and Greg Serio, state superintendent of insurance, should lead an effort to identify the steps that would cut overall system costs by 10 percent, Walsh wrote. At the same time, they should also design the health insurance policy that would cost employers 10 percent less.

Walsh praised both Novello and Serio, saying they have the necessary expertise in health-care systems and insurance markets, respectively, to lead such an initiative.