US Healthcare leadership—an oxymoron (part 4)
by Miki SaxonMatt Weeks has held various management positions in the financial services/banking industry, started, ran and sold a small business, ran a successful consulting practice and currently is CEO/founder of stealth mode startup eyeTmedia.
“The idea of some sort of assessment or tax on businesses to fund health care for those citizens who are otherwise not covered is a bad idea.
While I agree that ER room medicine is not smart preventative, wellness-based medicine and is not good social or fiscal policy, we have to find a different approach other than force-funding it on the back of business. And take note, it will primarily fall on small businesses.
Most of the businesses in our Great Country are “small businesses.” When I was at Intuit, makers of QuickBooks, Quicken and TurboTax, my team launched the Online Payroll Service. In the course of understanding what our customers wanted, we discovered that most of the “small business” enterprises were in fact sole proprietors, or very small companies with fewer than six employees, counting the owner(s).
Now let’s reconcile that fact (check with the SBA and DOL -Department Of Labor) with the other reality that most “workers” in The United States are employed at these small businesses. Not huge corporations. Thus the main “driver” of employment as well as productivity in the country are these small businesses.
One final step: If we believe the Fed, when they tell us that the driver of our economy is spending in the retail sector, then we must look directly to the bulk of the employees and their families for that spend, presumably coming from disposable income. So it is circular, as the small business employees spend their disposable income at other small businesses. Thus we still live in villages to a greater extent than we may believe.
However, small businesses have a devil’s bargain. If they are burdened with an additional expense in the form of a tax or assessment (like an extra payroll tax), they will have to lay off employees, or drastically reduce their pay, or their pay increases, absent some dramatic increase in productivity or other business growth. I cannot connect the dots between less cash in the company and dramatic growth. Less cash is not a driver of business health and expansion.
So the net effect of this well-intentioned but ill-thought-through idea will be less cash in the economy, lower net wages for employees, and questionable coverage, which is not mapped-out.
You might say that this will not impact these “small businesses” and that we’ll focus on the large businesses. The problem here is that those large businesses that do not already provide a reasonably sensible benefits package are, by definition, stingy and mean-spirited. They are unlikely to have some epiphany about “doing the right thing” and are more likely to just move offshore. As in moving all the jobs they can move offshore. Not a good thing either. That just leaves us with fewer employed people to pay for this whole idea.
So large companies who are bad actors are not likely to be the source of this cash (and will likely cut and run), and the bulk of employees in the country who work for small businesses are likely to be in even more pain if their companies are forced to make meaningful payments to some centrally managed health care superfund. And who among us believe that such a superfund will be efficient or effective?
So I say “yes” we need to approach the problem, and keep the value of covering the non-covered. I just suggest thinking it through a bit more. Many people think “business” is the big bad corporation. In fact, our economy is based on small businesses, and perhaps the only true ethical accountability for “doing the right thing” exists there, at the local, in-person level. Let’s dig a bit deeper and find a more effective approach.
It’s a hard problem. I don’t have answers… But I do know that a blanket “tax” or “assessment” on a monolithic “business” category is wrong-headed and overly simplistic given the complexity of the problem.”
Does the US really need to raise taxes to fund healthcare or is the money actually there, but being incorrectly spent via pork, earmarks, etc.?
Your comments—priceless
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February 15th, 2008 at 6:17 pm
I personally do not believe that businesses should be in the business of health care. In fact our health care, ideally, should not be tied to our jobs. There are many plans being promoted by our presidential candidates and as I see it we are slowing working our way to a universal health plan coverage.
At the present time, dental care, eye care and hearing problems, which become major expenses for the elderly, are not covered adequately by most health insurance plans.
State and Federal employees have the best health care coverage that I know of.
February 15th, 2008 at 8:30 pm
Joyce, you’re so right. Having healthcare insurance tied to a job is also bad for American competitiveness too, “Economists and business leaders talk about a phenomenon called “job lock,” when a person stays in a job primarily due to its attendant health benefits.”
Change would come far faster if the executive and judicial branches, along with Congress, had to live with typical, median consumer insurance.