Business Perspectives on Health Care

Health care experts gathered at CAP last week to discuss the heavy load businesses bear in America’s health care system.

From left to right: Sheila Ogle, Paul Fronstin, Meena Seshamani, and the Hon. Tom Daschle

The Center for American Progress hosted a panel of experts last Friday to discuss the health care quandary employers face, which is described in the new CAP report “Opportunity Cost and Opportunities Lost: Businesses Speak out about the U.S. Health Care System.”

Speakers presented business perspectives on health care and discussed what companies can do to help solve the crisis. They included Meena Seshamani, author of the “Opportunity Cost and Opportunities Lost” report; Paul Fronstin, Senior Research Associate of the Employee Benefit Research Institute; and Sheila Ogle, CEO of MRPP Media Agency.

“As businesses try to cope with just the economics of health care, they are struggling to find ways to bring down costs,” said former Senator Tom Daschle, a Distinguished Senior Fellow at the Center and moderator of the panel. “As I travel around the country, I see a lot more interest in change than I’ve ever seen before.”

This desire for change is a function of the rising health care costs straining the United States’ health care system, particularly employer-sponsored health insurance. Due to the 87-percent rise in health care premiums between 2000 and 2006, businesses both large and small are increasingly forced to choose between investing in their companies or providing health insurance to their employees.

The health care crisis has put the employer-based health insurance system, which provides nearly 175 million Americans with health insurance, at risk and in need of reevaluation.

“I do think we are at a critical time because employers are starting to reevaluate,” said Fronstin. “Employers are frustrated.”

Ogle, CEO of one of the small-businesses profiled in the new paper, agreed: “As a business owner, rising health care costs are a burden to me… you just cannot imagine how important [providing health care] is to the average worker in the United States.”

The report, developed with support from the Robert Wood Johnson Foundation, provides a case study analysis examining the experiences of 10 businesses as they work to control health care costs and offer health benefits to their workers. The case studies included in-depth profiles of two multinational corporations, two medium-sized companies, and six small businesses. The studies highlighted the companies’ decision-making about how (or whether) to offer health benefits, their efforts to control cost increases, and their strategies for determining how to continue providing health coverage amid rising costs.

“We wanted to get a more in-depth, nuanced look at how businesses are making their decisions on providing health benefits,” explained Seshamani. “Health care decisions require substantial resources… There’s a lot of time and money involved in these decisions.”

Businesses across the country and among all sectors agree that the provision of health care is a shared responsibility. “I think that health care is a shared responsibility. I think it should be shared between the employer, the employee, and the government,” Ogle suggested.

Fronstin bolsters this statement. He argues, “When you ask small businesses why they provide coverage, the response you get most is that it’s the right thing to do,” explained Fronstin. “These employers are doing everything they can to control health costs, but they have a ways to go.”

Businesses profiled in the report recognized that the cost increases they must grapple with are inextricably linked to the rising number of Americans without health insurance. Seshamani identified both problems as areas for reform: “Many businesses link these two problems because they realize that the uninsured ultimately generate higher health care costs through their inefficient use of the U.S. health care system—costs that are passed on to the insured.”

Daschle closed the discussion on an optimistic note: “You’ll never solve all these problems if you continue on a piecemeal basis. It has to be done on a comprehensive basis.” He argued that leadership, especially from the White House, is needed for real change to occur.

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