By Samuel Metz, M.D.
Oregon Business, July 3, 2019
Before business owners do battle against a dysfunctional health care system, they need common goals. And health care is indeed a big battle — Oregonians spend more on health care ($70 billion) each biennium than the U.S. military did in the Persian Gulf War ($61 billion).
One part of the battle was the Oregon Legislature’s 2013 authorization of a study of health care financing options (published by the RAND Corporation as “Oregon’s Options for Financing Health Care”).
Charged with gaining business input, I spoke to business owners to determine what they sought most from health care reform. Here are six goals they considered critical:
1. “Get me out of health care benefit management.” One owner said, “I know a lot about sheet rock. I don’t know anything about the health care needs of my employees’ children.” Owners want to focus on their business, not on congressional policy or the latest in evidence-based medical practice.
2. “Keep my employees healthy.” Whether an employee is part time or full time, productivity is lost when they call out sick. Healthy employees mean better business.
3. “Remove health care benefits from my labor negotiations.” Health care benefits are the leading cause of labor disputes. U.S. employers tolerate this as normal, but employers in other industrialized nations do not. Only the U.S. holds business owners accountable for choosing an employee’s insurance company, benefits and providers.
4. “Whatever I pay for employee health care, it can’t be more than my competitors.” Employer health care costs should be equitable. The advantage should not fall on business owners who can afford expensive attorneys to best game a wilderness of business laws.
5. “Whatever benefits my employees receive, they can’t be worse than my competitors.” If two competing businesses spend the same amount on employees’ health care, their employees should receive comparable benefits.
6. “Keep my health care costs stable and predictable.” If every year brings changes to employer health care costs, long-term planning becomes impossible.
These six goals should guide health care reform.
Our health care system misses all of them. And however well-intended, the Affordable Care Act (ACA) produced little change. This massive legislation (at 380,000 words, the ACA is shorter than War and Peace but longer than Moby Dick) was not a giant step forward — it was a great leap in place.
Health care still baffles most business owners.
Employers in competing nations are free of these burdens. They pay less for health care (on average, half — some only 40%) yet enjoy broader coverage with better outcomes. Notably, international employers don’t choose insurance companies, benefits or providers on behalf of their employees. Employees choose their own.
Our toxic bond between employers and health care cripples U.S. competitiveness in international markets. Businesses in other nations enjoy lower health care costs and healthier employees. This is not a level playing field.
How do other nations provide better care to more employees at lower cost without the bond between business and health care benefits?
They use universal health care. Each format is different, but (contrary to talk-show hosts) “socialized medicine” is rare and private insurance is common.
How does this approach lower cost? Despite differences, universal-care systems have these characteristics in common:
- Everyone participates in a health care plan. No exclusions. No opting out.
- Every policy is comprehensive. This does not mean unlimited; it means treatable conditions receive a treatment.
- Employees can see any provider. And provider payment reflects value of service, not value of employee insurance policy.
Most importantly, these systems separate benefits from employment.
This combination (in insurance talk, “single-risk pool, single-benefit schedule, single network”) generates enormous administrative efficiency.
How much? Americans pay more than $1 trillion annually in administration ($7 billion in Oregon), about 30% of all health care spending. International competitors pay one quarter of that. Where does this administrative spending go?
In the U.S., insurance administrators evaluate every health care bill to determine if the patient, treatment and physician were all included in benefits. U.S. health insurance administrators process 4 billion claims each year.
These insurance costs do not include the additional costs to physicians attempting to collect from insurance companies (U.S. physicians spend $82,000 annually on insurance billing) or costs to employers paying for additional HR personnel to manage health care benefits.
These costs add up quickly. The simplified billing of universal care with one risk pool, one benefit schedule and one network cuts administrative costs by half. These recovered payments fund expanded benefits for all employees without compromising outcomes.
Universal care suffers a bad rap in the U.S. Advocates promote it to families as a way to protect access, reduce costs and prevent medical bankruptcies. While these claims are correct, advocates neglect to emphasize business benefits.
A universal-care plan addresses the six health care goals that businesses seek: Employers are free from health care benefit management; all employees, full and part time, enjoy health care access; labor negotiations are free from benefit conflicts; all businesses pay equally for health care; all employees share equal benefits; and business health care costs become stable and predictable.
For employers seeking a more functional and competitive health care system, universal health care is the gold standard.
Dr. Samuel Metz is a Portland physician.