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Previous: Is it possible to provide adequate health care for all? If not, what gives?

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Company health care: A dead idea

By Matt Miller

26 February 2009

The American business mind is in the grip of what I call a “dead idea.” It’s an idea that was born a century ago, when industrial capitalism’s brutality and insecurity first sparked a political convulsion in the United States. It’s an idea that has become so ingrained in Americans’ collective psyche that it serves as a kind of wallpaper in our economic life, always present but rarely articulated. Once uttered aloud, however, this premise feels jarring and peculiar, and ultimately hard to defend. It runs as follows: if people need to reach beyond family to achieve a measure of security against life’s major risks (such as ill health or poverty in old age), they should look to their company, not their country, for support.

The United States is unique among advanced nations in organizing much of its society around this notion, and in building a vast array of institutions that cement its primacy in our culture. Because of transformations in the way we live and the way the global economy works, this organizing idea leaves tens of millions of Americans vulnerable and anxious, while shackling companies with soaring costs that render them uncompetitive.

Yet American business hasn’t rethought its role, even as it now spends more on health care than it earns in profits and the country’s employer-based system delivers the costliest health care on the planet. Remarkably, many prominent executives and Republican politicians believe this employer-based system shouldn’t change much, while Democrats typically think companies should be forced to do even more.

History and common sense suggest a clear answer: corporate America’s reflexive antigovernment ideology now stands in the way of corporate America’s self-interest. This reflex is hardly new, but to the extent it stops the United States from staving off a rebellion against global economic integration, this mind-set has become an economic threat in itself.

None of this means business needs to love government or overlook its idiocies and inefficiencies. It just means realizing, as executives in every other advanced nation do, that government plays a legitimate, indispensable role in assuring the provision of certain public goods. Once the capitalist mind opens, there will be no shortage of fixes for the health care problem.

Comment [9]

Agree? Disagree? Let us know what you think. Please include your full name with your comment. Comments may be edited.

Isn’t prevention better than cure?
Also prevention is also cheaper than cure.
If we focus on healty living and preventive medical checkups we would most probably avoid high cost treatement to many.

Posted 5 June 2009, 01:03 by Ajay Singh
While employer based healthcare may be an anachronism in todays changing environment, it is almost inconceivable that a government sponsored anything would be better. Politics have no place in solving massive problems like we face today, and that’s what we are facing, a political solution.

While it is true that the separation of the consumer from the buying process in years past has led to an uneducated buyer in the marketplace, it is not true that this issue, or the fact the most health plans are employer sponsored is the problem.

The real problem is that the United States is a population of depressed, addicted, overweight smokers who don’t get regular physical exams and who don’t know what their blood pressure or lipid profile is, or whether they are candidates for diabetes.

This fact leads to lost productivity in the workplace through higher absenteeism and presenteeism, and higher medical costs in middle and mature age.

The solution is for America to get up off the couch, take a walk around the block once a day, work in a veggie plate now and then and to have once less beer watching TV at night. We might also want to try working on our marriages and our relationships with our children a little bit too.

The impact of this kind of social change would be dramatic. Instead of focusing on “sick-care,” the way we do today, let’s start focusing on “healthcare.” It would take less than a decade to start seeing dramatic results and it wouldn’t cost a thing.

Posted 19 May 2009, 16:29 by John Carradine
The real problem with health care is that doctors have a monopoly on medicine and the ability to tax. As a result, we have a corrupt and incompetent bureaucracy that abuses their patients’ trust. Indeed, 25 states do not currently protect your right to be fully informed of risks and alternatives. Stanford still teaches medical students to make decisions for their patients.

What is more outrageous and under-reported is the low quality of medical “Science”. The fundamental assumption of medical research, “reductionism”, is simply mathematically false. And it’s taught in most medical schools. Ultimately, living systems are information systems because they store and use information. In ten years, medicine will be an application of computer science. Harvard now has a new $200 Million center towards this effort. On the West Coast, we have The Institute for Systems Biology. But there remains a more fundamental moral question.

Silicon Valley has the technology and expertise to replace doctors with science. Does society owe it to doctors to preserve their undemocratic political and financial interests?

I’ll close with a quote from Silicon Valley VC Andy Kessler in his book, “The End of Medicine”. “In the end, people are going to be shocked by just how little doctors actually know.”

Posted 19 May 2009, 16:25 by Paul
A nagging question has been haunting me and at the expense of sounding banal, elementary, unpatriotic, I’ll ask it anyway, in the hope of a cogent answer:

Q: Other countries are fully capable of providing a basic essential human service such as “Health Care”. Why can’t we provide it?(PLEASE read NY Times Article of 2 weeks ago entitled: Going Dutch: How I learned to love the European Welfare State by Russel Shorto); why, why can’t we offer the same?

A: (Please!)

Posted 19 May 2009, 15:18 by Maurizio Morselli
I honestly don’t know what the right mix should be, but I do know we cannot continue with an employer-based health care system. This mid-20th century model is rigid and out-of-sync with our rapidly changing, global workplace. People no longer work for the same company their entire lives and companies come and go with advancements in technology. There is a trend toward virtual companies/organizations that come together for a particular project. Having an affordable individual-based health care model would give people the flexibility to move from one project to another without forgoing a great opportunity because they can’t afford private insurance for themselves and their families.

Posted 19 May 2009, 13:19 by Nicola Beddow
All said and done, I am of a strong opinion that schools and companies are the best places where healthcare should be subtly but firmly ‘taught’, preferably by private consultants rather than in-house, as consultants (being out-siders) are better heard.
Many misgivings related to health happen due to ignorance. Most normal citizens of the world are likely to accept being ‘taught’ about health as they have come to realize that 1. it is expensive, 2. it is tiring to be sick, 3. ultimately if you survive the illness you have to take the precautions. It is not uncommon to hear people say ‘how I wish I knew it earlier’.
Every company needs happy and healthy employees. Any step taken to create happy and healthy employees should be most welcome, as you will have high productivity levels and low medical bills to pay.
In fact, employers should along with insurance companies make sure the message of good health is passed on to employees.
Company healthcare should continue and companies who don’t offer it should embrace it asap.

Posted 10 May 2009, 03:51 by Dr. Ajay Sati
If you think about the concept that my company is involved in the healthcare equation as much as my HMO and my doctor at times it puts this paradigm in perspective. External group coverage away from companys would remove one more interest group and cost in this already crowded supply chain.

Posted 6 May 2009, 14:26 by Frank Logano
Some connections between employers and employee healthcare should be retained for their practical merits.
1) Employers have an interest in the good health of their employees, increasingly evidenced by employers offering “wellness” programs that provide cash transfers to employees for healthy behaviors.
2) Employer payroll processes can efficiently facilitate precommitment by employees to saving some fraction of income for future medical expenses. An example of this would be the capability of payroll systems to automate employee contributions to health savings accounts.

Posted 13 March 2009, 10:50 by Devon Devine, JD
The real problem in healthcare is that the “buyer” (usually a company) has a very minimal role in managing the rising costs of healthcare. True they play a role in getting discounts from providers, purchase of drugs etc. But what about the year to year increases that more than off-set these discounts? Actuaries will tell you that these rises are due to the “aging” of the population. And if you buy into that cost model then you are also accepting the inevitability of rising costs as a consequence of the natural aging process. If buyers don’t complain why should anything improve? Empowering employers is what is needed – but that’s beyond the scope of this comment!

Posted 11 March 2009, 13:09 by Dr. Jacob Kuriyan