Single-Payer: Good for Business: Evidence Shows That Countries with National Healthcare Are More Competitive

By Mintz, Morton | The Nation, November 15, 2004 | Go to article overview

Single-Payer: Good for Business: Evidence Shows That Countries with National Healthcare Are More Competitive


Mintz, Morton, The Nation


Business leaders complain endlessly that the current system of private healthcare insurance based on employment provides fewer and fewer people with less and less quality care at higher and higher cost. Yet Corporate America turns its back on a publicly financed system, which, by all indicators, the taxpayers would willingly support.

Publicly financed but privately run healthcare for all--including free choice of physicians--would cost employers far less in taxes than their costs for insurance. Universal coverage could also work magic in less obvious ways. For example, employers would no longer have to pay for medical care under workers' compensation, which in 2002 cost them more than $38 billion. Auto-insurance rates would fall for them--and everyone--if the carriers were no longer liable for medical and hospital bills. You'd think that in its own selfish interest, Corporate America would be fighting to replace the existing system with universal health coverage. Yet it doesn't lift a finger.

Meanwhile, under the Bush Administration healthcare coverage steadily shrinks. In 2000, according to the Census Bureau, 14 percent of Americans didn't have it; in 2003, 15.6 percent--45 million--did not. Actually, 85 million Americans under age 65 were uninsured over varying periods during 2003-04, up from 81.8 million in 2002-03, according to Families USA, the consumer health organization. As more and more Americans become uninsured, spending on healthcare soars. By 2001 it accounted for 13.9 percent of US gross domestic product. (It constituted a much smaller share of GDP in countries with universal healthcare, such as Sweden, 8.7 percent; France, 9.5 percent; and Canada, 9.7 percent.) Average family premiums in 2005 are projected to be $12,485, up $1,768 from 2004. The federal Centers for Medicare & Medicaid Services expects healthcare outlays to rise from $1.8 trillion in 2004 to $2.7 trillion in 2010, nearly a trillion-dollar increase in six years. The forecast reflects annual increases of 14 percent to 18 percent. David Walker, head of the Government Accountability Office (GAO), the auditing arm of Congress, calls them "unsustainable."

A simple fact largely explains why spending bloats while the ranks of the insured thin: Health insurance is increasingly unaffordable. After rising 38 percent between 2000 and the last quarter of 2003, the costs of providing healthcare to employees rose 11.2 percent between January and May of 2004, according to the Kaiser Family Foundation's annual survey of 3,000 companies. "Close to 75 percent of 205 senior-level executives surveyed [in May] by the Detroit Regional Chamber rank employee health insurance as 'unaffordable' and 25 percent consider it 'very unaffordable,'" the Detroit News reported. The Kaiser Family Foundation says that from 2001 to 2004 the proportion of workers receiving health coverage on the job dropped from 65 percent to 61 percent, a loss of 5 million jobs with health benefits.

"Double-digit increases in healthcare costs are a drag on economic growth," says Henry Simmons, president of the National Coalition on Health Care, an alliance of groups working for healthcare reform. They "slow the rate of job growth," "suppress wage increases for current workers," "undercut the viability of pension funds," "put American firms at a steep disadvantage in world markets" and produce "severe long-term budgetary problems" for the federal and state governments.

Two unrelated but mutually reinforcing reports coming out on a single day, August 19, validate the economic-drag theory. First was a study that found a "relationship between job growth and health-care costs" in eighteen industries between 2000 and 2003. It was done for the Kerry campaign by Sarah Reber, assistant professor of policy studies at the University of California, Los Angeles, and Laura Tyson, dean of the London Business School and former head of President Clinton's Council of Economic Advisers and National Economic Council. …

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