The Business Case for National Health Care Reform
of health strategies, Office of Social Impact, AARP, declared “It seems to us
the business community is ready to engage in health care reform.” She also
suggested that states can serve as laboratories, noting that two panelists in
this session are from California and can tell us something about what is
happening there.
California, and John Arensmeyer, founder and CEO of the Small Business
Majority.
improves efficiency.
First, it “shares cost broadly and evenly,” he said. Today
as more businesses drop coverage, costs are shifted to those businesses that still
provide benefits. The businesses that provide coverage are paying for three
groups: (1) their own employees, (2)
other companies’ employees who get care but don’t have coverage, and (3)
Medicaid patients for whom government reimbursements for health care don’t
cover the full cost of that care.
A 2007 New America Foundation study shows a 10 percent cost
shift, which has helped hike premiums in recent years, Bodaken notes. The “freeloaders”
who aren’t taking up the responsibility to provide coverage—or can’t for
economic reasons—are helping to drive rising premiums.
Like others at the conference, Bodaken talked about giving
employees financial incentives for weight loss and giving up smoking. “We offer
cash payments to our employees for participating in smoking cessation or
weight-loss programs,” he explained. Of course some employers are wary of
investing in such programs. “Wellness programs bring a long-term benefit—what
if an employee changes jobs?” [On the question of whether financial incentives
are effective in causing employees to shed pounds and keep them off, see
“Should People Who Don’t Take Care of Themselves Pay More?” on www.healthbeatblog.org.]
Bodaken’s answer: “If we have wellness programs and other
employers have wellness programs, we’ll benefit from each others’ efforts. . .
. We’ve go to work together to provide those programs. . . . We’re less
interested in trying to “risk select” by hiring healthy people—we’re more
interested in keeping our employees healthy.”
Employers can be very powerful in pushing for reform, he
added, pointing to what has been happening in California.
He also pointed out that “Lack of universal coverage means
people keep a job just because they need the benefits, which distorts the labor
market.”
Finally, Bodaken added, “We are not getting value for our
health care dollars. As research done by Dr. John Wennberg [at Dartmouth]
suggests, about 30 percent of care is unnecessary, wasteful, and even
dangerous.”
Turning to California, Bodaken talked about what he termed “a
year of strange developments, even for California”:
- a Republican governor offerings sweeping universal coverage;
- Democratic leaders propose less than universal coverage;
- insurers support guarantee issue;
- hospitals
agree to tax themselves; and
- business proposes sales tax.
He also spelled out the framework for a deal:
scale for employer contribution (1 percent to 8 percent);
- 5 percent to 7 percent cap on individual contributions to premium;
- moderate deductible ($1,500 to $2,500); and
- financing from employer fee, hospital tax, and sales tax.
“We would not support a bill with guarantee issue unless it
has an individual mandate,” he added.
Will reform in California succeed? “Some in labor oppose
individual mandate,” he observed. At the same time, he said, “Businesses
accepts the sales tax—but not if it’s a big mandate.”
“There is a delicate balance between how much individuals
are asked to contribute
And the scope of benefits they receive,” he added.
The ballot measure will be a challenge, he acknowledged,
because
- California sales tax is already high;
Nevertheless, a combination of government, labor, business,
AARP, and Democrats is powerful in a high-turnout presidential election year.
then addressed the audience, and stressed three basic points:
Arensmeyer noted that while some people suggest that health
care reform will lead to socialism, the fact is that our present system
interferes with free-market entrepreneurship. Echoing a point made earlier, he
noted, “People feel they can’t leave a job where they have insurance. Some ask,
‘If Bill Gates had had to worry about health insurance, would he have started
Microsoft?’”
At the end of the discussion, in response to a question from
the audience, Bodaken addressed the elephant in the middle of the room: the
question of cost. If health care costs continue to spiral upward by 6 percent
or 10 percent a year, no amount of reform is going to give us a sustainable
system. Providers are going to have to improve efficiency, the panelists
agreed. Rather than capping the rates we pay providers, we have to demand
accountability.