Health care is an issue of national competitiveness. According to the Organization of Economic Cooperation and Development, the US is 1 of 3 member states (out of 29) who do not offer national health insurance. Companies in these other countries do not have to worry about their respective health costs because they don't have them. As a result, these companies have more money for their respective bottom line. Compare this to the US, where health insurance costs are eating US companies' bottom line at an increasing rate
Below is an excerpt from a speech by
Assistant Secretary Mark J. Warshawsky on January 16, 2006.
Benefit cost growth has exceeded wage and salary growth every year since 1999, taking a progressively larger bite out of the overall compensation package and leaving a smaller share for wages and salaries. In the third quarter of 2005 - the latest data available - wages and salaries accounted for about 70 percent of labor compensation, compared with about 72.5 percent in 1999. Health care costs made up about 5.8 percent of total compensation in 1999 but have jumped to 7.6 percent of compensation in the latest data.
The rise in benefit costs poses a problem for employers, employees, and government alike. For employers, benefit costs put upward pressure on the whole business cost structure, and potentially reduce profits, which immediately affects stockholders and could reduce expansion plans. For employees, as businesses resist raising the overall compensation package, the effect of rising benefit costs is a reduction in discretionary income. Government also faces significant costs not only for its employees but also for citizens covered by Medicare and Medicaid. Getting a handle on rising health care costs poses a special challenge for policymakers, but also an opportunity to raise worker discretionary income, reduce downward pressure on profits, and control government costs.
Many economists have noted the trend highlighted above. Companies are increasing employees benefit pay at a far faster clip than wages. As a result, employees are receiving smaller actual pay increases and higher benefit increases.
This creates the following problem for employees. While they are technically making more money, the new money they are getting can only be used to purchase one product - health care. The amount of money employees receive that is available for other expenditures (food, rent, clothing, etc...) has risen a paltry inflation adjusted 3% over the last five years. And this assumes the employee can actually use the health benefit. With more companies going to higher deductible policies, employees are forced more and more often to dip into their paltry wage gains to pay for a health expenditure that is supposed to be covered by their respective benefit package.
In addition, this trend in health costs is hurting smaller businesses:
We are already witnessing one important consequence of rapidly rising health insurance costs in the continued erosion of the group health insurance market, particularly in the small group market. According to the Kaiser Family Foundation's annual survey, nearly 100 percent of firms with 200 or more workers offer health insurance to their employees, yet only 59 percent of firms with between 3 and 199 workers do, a drop of 9 percentage points from 2000.
Small business is at an extreme competitive disadvantage when compared to larger firms because a smaller company has fewer monetary resources to purchase health insurance. As a result, employees of these companies don't have the same benefits as employees at larger companies.
Relieving companies of this expense at the national level will relieve these companies of a huge expense. A single-payer health system is more efficient than the myriad number of interweaving policies the US currently has. The Federal government's massive size would allow them to negotiate aggressively with service providers to lower and contain costs. It would allow companies to free up money they pay in benefits to their respective bottom line. In short, national single-payer is a net win for business and employees.