The current political firestorm over health care, fueled by moves to repeal the Affordable Care Act without offering an alternative, opens the door for an unlikely group to take radical action — the country’s CEOs.
They could unite and present to the country with a simple message: “Our shareholders are demanding that the nation’s political leaders get real about the health-care crisis. From a fiduciary standpoint, we can’t continue to support any health-care system that drains our equity and competitiveness.
“A single-payer, ‘Medicare for all’ system, with its miniscule administrative cost, would check all the boxes in any Harvard Business School manual for effective programs. We endorse single payer because it’s the best business plan for the economy and our businesses.”
Understandably, people would be skeptical about trusting the business community to play such a pivotal role in shaping a system that means life or death for millions of citizens.
After all, businesses too often embrace a set of short-sighted practices that have fostered greed, the exploitation of workers, decades-long inequality and our planetary ecological crisis.
But, the beauty of this appeal is that, from the get-go, we can give license to the titans of industry to toss aside the moral aspects of the virtues of single-payer (in other words, the annoying spectacle of people either dying or going bankrupt because of a lack of affordable health care). It’s a glorious case of pure economic self-interest.
Here is what CEOs should be able to see. Two dominant wings of the health-care reform debate have been locked in battle for decades but particularly since the early 1990s. On one side of the spectrum sit mislabeled “free market” health care advocates, whose camp cries out “government control” or “waiting times” or “reduced development” with no basis in fact. They mislabel themselves as representative of the free market because the health care industry (insurance and pharmaceutical companies) is the opposite of a free market. The industry benefits, among other things, from massive tax breaks, subsidies and trademark protections which heap costs on the public and, indeed, stifle competition.
This wing is mostly content to force customers to pay whatever prices the industry demands. While generally a Republican redoubt, plenty of “pro-business” Democrats walk this line. For example, a recent Senate amendment to allow for importation of cheaper drugs was defeated with the help of 13 Democrats — including Cory Booker, Patty Murray and Robert Menendez.
On the other side of the debate are approaches best defined as the Clinton-Obama plans. Each were content, in their own ways, to try to bend the cost curve but not fundamentally alter the system.
The Clinton health-care effort and President Obama left intact a grossly inefficient system. Indeed, the insurance industry spent billions of dollars promoting the Affordable Care Act because, by requiring citizens to opt in to avoid a penalty, the system delivered millions of new customers, and promised huge profits.
Neither of those wings has transformed our system into what every sane developed country has — a single-payer system that is a normal component of a thriving economy
Such a system would look very much like the proposal put forward by Bernie Sanders during his campaign for president. Employers would have paid a 6.2% levy in his proposed plan — yet the average annual cost to cover a worker with a family making $50,000 a year would have dropped from $12,591 to just $3,100.
So, a medium sized company of 1,000 workers would save close to $9.5 million. Scale that up to a company like Apple, which says it directly employs over 76,000 people, and Apple would bank a cool extra $1.1 billion to put to a more productive use.
Before CEOs hear the weak accusations that single payer is fine and dandy for those European socialists in Scandinavia or France, consider the experience in Australia.
After a very vigorous debate in the 1980s, the country adopted what is essentially a single-payer system in 1984, though a highly regulated private system also exists alongside the public one (it services, for example, non-citizens).
In 2014, Australia’s health-care system ranked sixth out of 51 countries in efficiency — the US was 44th. Australia spent 9% of its GDP on health care, compared to the US 17% in the United States.
These aren’t socialists running the country, either. Australia has been governed for the past four years by a center-right coalition led by the conservative Liberal Party, which has never proposed rolling back the single-payer system. Indeed, when the Liberals recently proposed a $7 copay to see a general practitioner, the government’s popularity cratered — and it backed off the idea.
More important, there is virtually no chance the Australian business community would want to shoulder costs now mastered by the efficient public health care system.
Embracing single payer in the US would also divert money into peoples’ pockets in increased wages. For the past two decades, the greatest source of conflict in collective bargaining focused on company demands to both cut health care coverage and raise workers’ contribution. Virtually no money was left for wage increases — partly accounting for the national flat wage growth over that period. Taking health-care costs out of the equation of collective bargaining, or even in nonunion workplaces, would mean bigger paychecks — assuming companies didn’t divert the savings into nonproductive CEO pay.
Lastly, by virtually every measure worldwide, a single-payer system produces results that actually keep people healthier. They get preventive treatment, comprehensive care and never risk their health by skipping taking prescribed drugs — as they do in the US — because of the outrageous costs.
That translates into a healthier workforce, fewer missed days at work and a more productive worker when they are on the job, because fit in body, as we know, translates into fit in mind. Thus, companies who currently don’t offer health care or only offer — like Walmart — a bare bones, expensive health care option would benefit, for a marginal cost, because of a larger percentage of hale and hearty employees.
It’s an astonishing opportunity for CEOs because they could, with one policy gambit, save billions of dollars on the bottom line, give workers a raise, have more money to invest in research and development, improve international competitiveness and, for a change, earn the respect, admiration and gratitude of millions of Americans.
This is an easy one: lead with your wallets, not your hearts.