Band-Aids Won't Cover Premium Hikes

September 27, 2005
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Sooner now than later, it will be common knowledge among all Americans that the health-care “system” in this country has been bankrupted. Grand Rapids Business Journal this week reports in great detail on health benefits and providers, all offering Band-Aids for a system that is hemorrhaging.

As reported here last month, the U.S. Small Business Administration working with the Kaiser Family Foundation surveyed business owners and leaders across the country. Could any reader be surprised that premiums are up an average of another 9.2 percent or that now 40 percent of all businesses have stopped providing coverage for employees, overwhelmingly citing cost as reason for the decline.

— Health-care costs represent 17 percent of the Gross Domestic Product, and are widely expected to exceed 20 percent in the near future.

— The SBA /Kaiser survey shows that the cost of health care for family coverage exceeded the gross earnings for a full-time, minimum wage worker.

— The rate of cost increases is three times the growth in workers’ earnings and two-and-a-half times greater than the rate of inflation. Since 2000, premiums have increased 73 percent.

— The survey found that 20 percent of all employers currently offering plans intend to offer employees higher-deductible plans.

— A Michigan Chamber of Commerce survey that polled employers across the state in late summer found that business owners now favor a single-payer system by over 40 percent.

Reports in this issue offer a full menu of “options” for business owners and the self-insured to continue to navigate the nightmare, but none resolve the issues.

Robert Moroni, General Motors’ health-care plan benefit director, rightfully and candidly speaks up often saying the “system” cripples the economy in the country. Health-care costs add $1,525 to the sticker price of every GM vehicle made in America. Compare that to $120 for vehicles made in Canada. And Moroni pointedly notes that the quality of health care in this country ranks second to last compared to other industrialized nations (including Germany, Canada and Japan), using 16 common health-care quality indicators, including mortality rates.

News reports this year of Americans leaving the country for needed surgeries in places like BumrungradHospital in Thailand are increasing. The Business Journal interviewed the marketing director of that hospital and reported on the business in the June 6 issue. One of the examples used was that of man who would have paid $100,000 for a complicated heart surgery here, which cost him $12,000 in Thailand

The issue is the elephant in the room. Businesses, which absolutely require a competitive edge in a “flat world,” will not continue to pay the outrageous U.S. prices for an inferior service. The elephant will then sit on the health-care community that helped create the beast.    

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