Free corporations from health expenses
OPINION
The Business Journal (Milwaukee)
From the September 2, 2005 print edition
Guest Comment
By Jack Lohman and Dr. Eugene Farley
It is by historical accident that U.S. businesses provide health care to their employees, and it has now placed them at a serious disadvantage when competing globally or against imports whose manufacturers do not have to add this extra 8 percent to 15 percent to the price of their products.
In other countries, health care is a taxpayer burden. It is here too, but we pay through many circuitous routes that have caused jobs to leave the country. We add these costs to our product prices, and it makes us uncompetitive with products that come from countries that already have taxpayer-paid medical systems. Corporations in Canada pay only an $800 annual per-employee tax. The result, as just one example: The Big Three auto companies now make more cars in Ontario than in Detroit, and Toyota just selected Canada over the United States for its new Rav4 manufacturing plant. Jobs are leaving our country because they are doing it right and we are doing it wrong!
The United States must adopt a universal health care system like Canada’s, but long wait times do not have to be a part of our system. We can do better and we will do better. With universal coverage, Canadians have longer life expectancy (by two years), 35 percent lower infant mortality, and 100 percent of the citizens are covered with 40 percent less in total costs. They’ve paid for it with a system that has 8 percent rather than 30 percent administrative costs. More than 90 percent of the patients love it, as do most of the physicians.
But who would pay for our system? The same people who are paying for it today: the taxpayers. We all pay for our health care system, which costs $1.6 trillion each year nationally, and 100 percent of this money comes from we the people, through taxes, premiums, co-pays, deductibles, purchases, employer tax breaks and the other methods we use for collecting money. When we buy product, that company adds its health care costs to the price and we pay at the cash register.
Jobs at stake
But that added price is killing American jobs, and if the feds aren’t willing to fix it the state must. We are only talking about changing how we collect and use the same health care money. Such a system would also replace our Medicaid and BadgerCare costs, assume 40 percent of worker compensation costs, and even replace Medicare if the feds were willing to buy in.
Even if it were zero savings we’d be market winners. And we’d have more than adequate coverage, though it would not cover non-essential lifestyle enhancement surgeries or drugs. Gap insurance would be an option for employers and those wanting to pay for those procedures themselves. That leaves a job for the 400 insurance companies.
Once we eliminate employer-paid medical coverage, which now represents from 8 percent to 15 percent of U.S. employee costs, companies and jobs will stop leaving the state and new companies and jobs (and the tax revenues that result) will start flowing into the state. A properly run universal health care system is the most business-friendly and public-friendly system available.
If our state is the first to do this we will gain jobs from other states. If we are last, they will get our jobs. We must be the leaders, and business leaders must sideline the health care interests to make it happen here.
Jack Lohman of Colgate is the retired CEO of an independent diagnostic lab. Dr. Eugene Farley is a retired physician in Madison.