Supporters of single payer healthcare proposals (Medicare for all) focus on patient benefits: universal access, lower healthcare costs, and improved outcomes. However, employers also benefit. During a series of informal interviews with one of the authors, small business owners expressed what they expected from an ideal healthcare plan:
“Keep my employees healthy.” Successful businesses require able employees – healthy both physically and mentally.
“I’ll pay for healthcare, but not more than my competitors.” Healthcare costs should be equitable regardless of size, region, or industry… but they aren’t now. Smaller start-up firms lack the clout to negotiate the lower premium prices enjoyed by larger employers.
“Don’t make my employee benefits any worse than those of my competitors.” Equal employer contributions toward healthcare deserve equal employee returns.
“Keep my healthcare costs stable.” Unpredictable healthcare costs render strategic planning impossible.
Employers confirm that our current system achieves none of these goals. And whatever its good intentions, the Affordable Care Act did little more for employers than award them unwanted responsibility for navigating a complex array of federal laws, achieving little other than increasing paperwork and business expenses.
These burdens do not afflict employers in other industrialized nations. Per OECD 2017 figures, these nations pay less for healthcare yet enjoy broader coverage with better outcomes. While the US spends $10,209 per capita for healthcare, most other countries spend half that: For example: Israel- $2,834; Italy- $3,542; Canada- $4826; UK-$4246; Netherlands-$5386. All these nations spend less but get more.
US overspending on healthcare does more than just increase business expenses. It drains resources from other social spending vital to a healthy economy: education, energy research, and infrastructure. Inadequate spending on these services cripples our international competitiveness.
Whether these industrialized nations choose a single payer or a multi-payer plan, their national universal care plans share these characteristics:
- Everyone participates in a mandated healthcare plan. Individuals, not employers, are responsible for complying with this mandate.
- Every healthcare policy offers identical, comprehensive benefits. And “comprehensive” means “treatable conditions receive treatment,” not “unlimited.”
- Patients, not employers or insurers, choose providers. And provider payment reflects the value of service, not insurance coverage.
By using this efficient combination of single risk pool, single benefit schedule, and single network, single payer plans generate enormous administrative savings.
How much savings? American businesses and workers pay over $1 trillion annually in administration, about 31% of all healthcare spending, nearly three times higher than international competitors. Insurance billing in these countries is as simple as the swipe of a healthcare card.
What does our extravagant administrative spending pay for? Not for healthcare. Each year, American health insurance administrators process four billion claims. But there’s more: Physicians spend $82,000 annually to collect payment from insurance companies. And employers pay for additional HR personnel dedicated to managing increasingly complicated healthcare benefit plans.
In contrast, the simplified billing of single payer would cut American administrative costs by at least half. These recovered administrative savings are more than enough to cover the uninsured and expand benefits for all employees.
Single payer plans address the five healthcare goals that employers want most.
Competing healthcare proposals (e.g. medical savings accounts, high risk pools, public options, Medicare by-ins and Medicaid by-ins) must demonstrate that they adequately address these goals to be credible. So far, none have.
For employers seeking a more functional healthcare system, one that allows them to concentrate on core business and compete internationally, single payer remains the gold standard.