As a longtime entrepreneur with employees working throughout the United States and Canada, I’m continually surprised at what isn’t discussed in the health care debate.
Yes, it is important that people get good quality health care services. And yes, it’s very important to find ways to contain -- and maybe even reduce -- the cost of health care services.
What we don’t talk about is how the cost of health care is embedded in goods and services made or delivered in this country. Because most U.S. employers cover the cost of health care benefits -- on behalf of their American workforce -- insurance premium costs must flow through nearly every product or service.
Our company did business in Canada for about eight years with about 900 employees. We could have employed American workers, but chose to go to Canada in part to avoid paying health insurance premiums. The decision saved our firm up to 25 percent on labor and benefits compared with what we would have paid U.S. workers. Labor markets in other parts of the globe provide even greater labor savings for businesses.
I am not a huge advocate of global outsourcing, but I believe that health care expenses are a major driver of the global labor shift. The escalating cost of insurance is one of the major reasons why we see Wal-Mart and major labor union leaders lining up on the same side of the health care reform issue advocating for some sort of universal coverage.
I hear the rhetoric about health care reform turning American into a “socialist country.” Frankly, I have no idea what that means. But I will say that exploring solutions to the health care cost conundrum for businesses would certainly help our global economic competitiveness.
During the next several years, I’ll be interested to see how the new health care reform law affects the cost structure for goods and services. According to our accountant, the law won’t significantly affect us because our company already provides health insurance to employees as a way to attract and retain good people. For this reason, offering a good health insurance plan (with a significant employer contribution) is an important benefit in building a great team and being a competitive employer.
Our hope is that as more people purchase their own insurance, businesses won’t need to augment so much of the cost of the uninsured. We in America’s business community will be watching closely to see how implementation of the new health care reform law affects our workers and our bottom lines.
What do you think? Is the cost of health care diluting our competitive edge, or is it just the price of doing business? Please share your insights in the comment box below.