Small Business Times, March 31, 2006

Where are business leaders when we really need them?

Employee health care is a major business expense that closes down some companies, causes others to outsource manufacturing, and still others to relocate to Canada where medical costs are just $800 per year per employee versus our $6500.  GM is doing it; so is Ford. There are more Big Three autos being made in Ontario today than in Detroit. Over 60,000 US jobs lost in this industry alone.

But otherwise good businessmen still fall for the well-orchestrated rhetoric of the health care industry. Understand this very clearly: OF COURSE the health care interests do not want to see a Canadian-style system that would eat into this profitable market. Why else the stories about how bad the Canadian system is, even when it is not bad at all. What does it tell you when over 90% of Canadians prefer their system to ours? Point made.

Understand that the health care interests in Canada are lobbying to reduce that systems’ funding (to further extend the wait times) so their Parliament will convert to a US style for-profit system. Even US health care companies are poised to open branches north of the border if or when that happens. They are all, naturally, after the big bucks.

It is not our costs that have escalated at five times the rate of inflation; it’s the charges that the health industry has imposed. How else to offset the $3 million per year one Wisconsin hospital CEO draws, while another CEO of a popular HMO receives a $72 million salary. Doctors can become millionaires in the US but they can’t in Canada, so who in the industry would want to change that?

Picture this alternative: Your company is totally out of the health care business and your employees instead get their care through a Medicare-for-all system. Not socialized medicine; just a system with one payer rather than the 400 insurers we now have in Wisconsin. See any doctor you like and go to the hospital of your choice. Perhaps even have a small co-pay to reduce frivolous visits. That’s the Medicare system of today. Your costs are next to zero. What’s not to like about that?

Why aren’t the politicians on board with this? Because you, Mr. Businessman, don’t have a lock on them; they also get major campaign funds from the health care industry! Over $100 million per year is spent on lobbying and contributions at the federal level and $1.4 million annually at the state level.  Forget for a moment that a single-payer system is in the best interest of the public, the voters or the state’s economy. It’s in your best interest too.

Let me dispel a major myth: There is no such thing as “free-market competition” in the health care marketplace. “Market-driven” is corporate spin for “profit making.” It’s hogwash. This is not a couch that patients are buying; it is their health and survival, and that of their loved ones. They will not price shop. People go to the doctors they trust and accept his or her recommendation on hospitals. Period. The health care interests know that, and our politicians and businessmen should too.

The Medicare drug program should be proof enough that we must avoid confusion and complexity, which drive up costs. This, incidentally, is a program that was bought and paid for by the insurance and pharmaceutical industry, and you can see what we got in return. We must keep the private interests out of it. The greater the number of insurers that are involved in the system, the more of its resources that will be diverted from patient care to profit-taking. Medicare’s administrative costs are 3% compared to 30% in the private sector, and Medicare employs a fixed fee schedule that fairly reimburses physicians and hospitals. Even if we increased those fees by 10% we’d be ahead of the game.

I am not a fan of health savings accounts. They will encourage patients to avoid preventive medicine, which will be more costly in the long run. Healthy people will like them, until they age and/or become unhealthy. If you look at who is going to be the winner, in this case it’s not going to be the patient or the public. Though I’m a Republican, I don’t trust this GOP innovation, and the fact that the industry supports them worries me a lot. They aren’t dumb.

Health care should be a public service, and the taxes will be more than offset by the lower consumer prices for product. It is only by historic accident that it is now an employer burden. When employers pay for health care costs today, they add those costs to the price of their product and we pay it at the cash register. So let’s eliminate the middle man. Let’s make it simple. And by eliminating the waste and inefficiencies we can cover 100% of the people for the same dollars we are spending today.

What to do about it? Ask your senator and representative to support SB388 and AB807, and then spend your health care dollars growing your companies.  

Jack E. Lohman

Lohman is a retired business owner who lives in Colgate and is a member of The Coalition for Wisconsin Health. He can be reached at jelohman@gmail.com.