Big Business and Health Care

BIG BUSINESS AND HEALTHCARE….I really do think big business wants out. But wanting out and supporting something else are different animals.

Why is today different from 1993-94? During the early days of the Clinton administration, big business was willing to support health care reform. What happened was that when the details of Clinton’s package became clear, they decided they could get a better deal from managed care than Clinton care. For five years or so they did get a relatively good deal. Health care costs moderated. But that was only by squeezing down payments to doctors and hospitals, not by changing the delivery system in any real way.

Today there is no managed care alternative. The only alternative is just stopping to offer health care. This is possible for small firms ? since 2001 more than 5 million jobs have lost health insurance coverage. But it is a bit harder for big firms.

What big business needs is an alternative it can live with that will turn its frustration ? I want out of health care! ? into positive support for a reform proposal. Previously the two alternatives looked very bad for business. Mandates with subsidies ? kind of like Clinton’s proposal, play (offer health care) or pay (pay a tax to get your workers coverage) ? is not tolerable to business. They want out of health care, not a mandate to cover it.

Single payer is something they are instinctively against and will not support.
They are tempted by medical savings accounts. Witness Hank McKinnel of Pfizer, who recently endorsed them. There are many problems with this approach. I have previously mentioned some. But the best way is to think of it as the health care version of private retirement accounts ? you are on your own tab and bear a lot more risk and expense.

I think vouchers offer them what big business wants. There is coverage for their workers. It’s financed by a predictable Value Added Tax that doesn’t fall on business and could be used in interesting ways for restraining imports and promoting exports. VAT is something that both Democrats and Republicans seem to be forming a consensus behind because it encourages savings and taxes consumption. Finally, getting out of health care will allow business to raise wages and hire people based on productivity, not the drag of fringe benefits.