Wednesday, December 7, 2011

Please explain why healthcare is linked to employment....

Why should the level of my healthcare, and its cost to me, be employer-based?

If I were a conspiracy theorist (some days I have that tendency) I could easily think that employer sponsored health insurance was a corporatist plan to keep employees tethered to jobs.  I might imagine that this linkage makes workers less mobile; less likely to move from job to job in search for the most rewarding position, the perfect fit for them.

I might even think that support for this crazy theory is found in the widespread corporate opposition to single payer (read "portable") healthcare.  Taking it one baby step further, I could imagine that describing single payer healthcare as socialism, is a carefully crafted scare tactic designed to keep us exactly where we are.


If, on the other hand, I did some research, I'd find that while it's true that employer sponsored health insurance limits worker mobility, and forces many to stay in jobs they would otherwise drop like bad habits, this system started during World War II, to offset wage controls. Companies couldn't offer competitive wages, but they could provide healthcare benefits. This was hugely successful and the process was cemented in 1954 when the IRS decided that employer-paid health insurance premiums were tax exempt.

Game. Set. Match.

Another reason the very appealing conspiracy theory doesn't hold water is that corporations aren't especially thrilled with escalating insurance costs. They are either forced to cover the increases to compete in the recruitment marketplace or pass them along to employees, who take a dim view of pay cuts.

In fact, there's a sad little chart on the first page of this report, produced by the Kaiser Family Foundation. It shows that between 2001 and 2011, health insurance premiums for the average family increased 113% from $7,061 to $15,073. Holy Moly!  Employers and employees have shared the increase, and neither are happy. At the same time, incomes have dropped significantly: Median family income in the US has decreased 7% since 2000, after adjusting for inflation.

I challenge anyone to convince me that in the US, where we often outspend other industrialized nations in healthcare by 2:1  or more, with outcomes that are the same or worse, but seldom better, our employer-based healthcare system is worth salvaging. Apparently we spend about 18% of GDP on healthcare and no other country approaches that level of spending. I dug up some info from 2009, provided by PBS, when we were only spending 16% of  GDP on healthcare. The chart below lists countries in ascending order of World Health Rank (according to the World Health Organization):

The US was 37th in World Health Rank, yet we spent well above the others. The only country that came close to our spending is Canada at 10.1 % GDP. (And you know how we feel about Canadian healthcare.) But hey, at least we're well ahead of Turkey!

Our healthcare costs more than anywhere else, the quality is only slightly above average, we have millions of uninsured and underinsured in our country, neither employers nor insureds are happy with with the situation.

So....who, in this whole mess of employer-linked healthcare insurance, benefits from the status quo?



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