Health-care reform: the tide is with us.

• Author: Roy, P. Norman
• Position: From the President

Health-care reform has become the great debate of our time. Financial Executives Institute is vigorously advocating the position of corporate financial management in this debate. Last year, we published a position statement that clearly outlined our key principles on reform, and we are gratified to see that many leaders within business and the government are fighting for the same principles. These include the Business Roundtable, the National Association of Manufacturers and the Chamber of Commerce, as well as Representative Jim Cooper of Tennessee, Senator John Chafee of Rhode Island and other members of Congress.

In our statement we said that, in bringing health-care costs under control, the "free market forces of supply, demand and competition must be allowed to work." We are convinced that reform can't achieve its cost-controlling goals until individuals start making more informed health-care choices and bearing more financial responsibility for those choices.

The Clinton administration's goal of controlling and reducing health-care costs is commendable, but the approach -- price controls -- is unacceptable. The United States tried price controls during World War II and during the Nixon administration, only to learn that such artificial solutions create more problems than they cure.

We also see growing support for FEI's principle that the cost of the basic benefits package should be financed by cost savings. This goal sounds illusory, until you consider how much money we are wasting each year on overly complex administrative procedures, unnecessary medical tests and ill-conceived litigation. If we can eliminate a substantial part of this waste, we can provide coverage for everyone and still cut costs. And by covering everyone with one basic package, we can eliminate another source of waste: cost shifting.

In its position statement, FEI called for a single regulator, namely Uncle Sam. The White House, however, has argued for giving the states the power to regulate, to set benefits beyond the national standards and to impose special taxes on health-care alliances, which would include corporate, self-insured...