As a physician in private practice and a small-business owner, I might seem an unlikely advocate of a single-payer health care system. Many physicians and business leaders cringe at the mention of single-payer health care, equating this with "socialized medicine." In fact, a government-financed, privately delivered health care system would benefit businesses large and small, as well as consumers.
Unlike almost all other industrialized countries, we do not have a health care "system" in the United States. Rather, we have a patchwork of private health insurance, the cost of which is borne mostly by employers, and government-financed insurance covering the elderly, the disabled, veterans and some-but not all-of those in poverty. This leaves 47 million people (mostly hardworking poor people) without insurance, and many more underinsured.
The cost of providing health insurance to employees has been rising by 10 percent to 15 percent annually, depressing profits and wages and hurting our competitiveness in the global marketplace. The increasing cost of health care and benefits is the leading concern of employers in Rochester, according to the Rochester Business Alliance's Web site.
Our global competitors, including Japan, Canada and the European Union countries, all have some form of government-financed health care. It is not only one of their greatest competitive advantages in a global economy; it is also one of the most attractive reasons for U.S. companies to relocate operations to those countries.
A frequently cited example of our competitive disadvantage is in the automobile industry: The cost of every General Motors vehicle includes a $1,500 health care premium, whereas Toyota's health care cost is a mere $95.
While virtually everyone agrees that rising health care costs are hurting businesses, not everyone agrees on the solution. Replacing our current private/public insurance hodgepodge with single-payer, transportable "Medicare for All" removes the burden from employers. Businesses would no longer be providing health insurance, saving not only the direct cost of premiums but the substantial costs incurred in making sense of the ever-changing "products" offered by health insurers. Also, cost shifting in the form of higher deductibles and co-payments often leads to disgruntled and unproductive employees. In physicians' offices, simplifying the billing process and eliminating referrals, prior authorizations and other administrative hassles would save additional costs.
Even with a modest increase in payroll taxes to expand Medicare, the overall saving for business would be enormous. In addition, economic development depends on entrepreneurs taking risks and starting new businesses. In our current system, the cost of health insurance is a significant deterrent to such risk taking.
Even those who acknowledge the problems of our current non-system are skeptical of any solution that involves more, rather than less, government. But the perception that government-financed health care is less efficient than private insurance is incorrect. Private health insurers have administrative overhead of 15 percent to 25 percent, while Medicare operates with 3 percent overhead. Marketing, advertising, exorbitant executive salaries and fancy corporate headquarters all contribute to high insurance premiums. A single-payer system could save $350 billion in administrative overhead, enough to expand health insurance coverage to those currently left out.
Finally, let me address the political feasibility of a single-payer health care system. At the moment, neither political party endorses a single-payer solution, at least in part because of fear of the powerful health insurance lobby. Many people remember the "Harry and Louise" commercials funded by insurance lobbyists, which derailed the Clinton health care reform effort in 1993-4. However, 92 members of the House of Representatives have already co-sponsored H.R. 676, a national health insurance bill. With support of the business community, more legislators might join and help to make this necessary reform a reality.
Over the past 60 years, numerous attempts have been made at the state and federal levels to achieve universal health care coverage. All have failed, because they have taken an incremental approach to expanding the current private and public systems. The only affordable and feasible solution is a complete overhaul of the financing system, while maintaining the private delivery of health care, which gives patients choice among doctors and hospitals.
James Bertolone is president of the Rochester Labor Council, AFL-CIO. He also is president of the American Postal Workers Union Local 215.
02/06/2009 (C) Rochester Business Journal