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Will Business Really Lead the Charge for Health System Overhaul?

By John Reichard, CQ HealthBeat Editor

September 14, 2007 --- If the next decade brings intensive congressional debate on an overhaul of the U.S. health system, what role will business play? The buzz now is that, unlike in the early 1990s, U.S. businesses at a competitive disadvantage in the global economy because of rising health costs will lead the charge for change—not drag their heels the way they did during President Clinton's failed attempt to institute universal coverage. But in the end, will business yank its support despite the current buzz?

Speakers at a forum Friday asserted that not only is the mood in the business community open to overhaul, it offers a golden opportunity for an astute politician to build political support. That's particularly the case, they said, in the sector of business most identified with killing off the Clinton plan: small business. A changing economy that leaves tens of millions of Americans hunting for coverage on their own—those who work as independent contractors, small entrepreneurs, and employees of small businesses—is ripe for a politician who could champion effective ways to obtain affordable coverage, speakers said.

Unlike during the Clinton era, "the business case for health care reform is being made very forcefully," Carl Camden, CEO of Kelly Services, said at the event sponsored by the Century Foundation, The Commonwealth Fund, and the AARP. A growing number of businesses are banding together in support of universal coverage and less-bloated health care spending, he said. "As a businessman, I find the price-value relationship to be appalling," Camden said. Per-capita health care spending in the United States far outstrips that of other industrialized nations, yet much of it goes for treatments that are ineffective or of unproven value. "The American people are paying about 50 percent more to get 50 percent less," he asserted.

Camden, whose business provides temporary staffing through some 750,000 employees, estimated that there are some 30 million Americans working as free agents, freelancers, or entrepreneurs, many of whom are highly skilled. These workers stand at America's "creative edge," he said, adding that a politician advocating solid proposals on behalf of this group would reap "great political advantage."

John Arensmeyer, who founded Small Business Majority in 2004 because he found other small business lobbying groups to be too "dogmatic and ideologically based," described small business as a potent political force that needs an overhaul of the U.S. health care system in order to be prosperous. And in order for that overhaul to succeed, politicians, in turn, need the support of small business, he said.

Workers in small businesses account for 52 percent of the private sector work force, he said. "This is where most of the people in this country work."

Although small business owners were pivotal in the demise of the Clinton plan, Arensmeyer said his polling shows that they aren't heavily Republican, and that they regard the cost of health care as their biggest problem. His survey results found that 30 percent of small business owners and managers are Republicans, 23 percent are Democrats, and that by far the largest group—41 percent—consisted of independents.

Critics of overhaul plans have, in many cases, depicted them as a threat to the free market, but Arensmeyer said that "we cannot allow the opponents of reform to seize the high ground of the free market." The high costs of health care block many people from starting their own businesses and so undermine the free market, he said.

But while a number of business executives speak generally about the need for a health care overhaul, their ideas vary about how the system should be changed. Michael Critelli, CEO of Pitney Bowes, said Friday that the focus of changes ought to be on health, not health care. The highest priority of overhaul efforts should be pinpointing ways to keep people healthy by considering policy changes within a "holistic framework" that goes beyond insurance, he suggested.

Thus, policies should be revised to end subsidies that promote the availability of unhealthy foods in inner city food stores, reduce traffic congestion that causes asthma, create spaces in which people could exercise, and increase access to urgent care clinics—as well as to make it cheaper for people to take drugs and to get screening to prevent serious diseases, Critelli said.

But not only must different policy visions be reconciled, business would have to come to terms with likely mandates that might be similar to those that doomed its support for previous overhaul efforts. Cheryl Matheis, Director of Health Strategies at AARP, voiced some skepticism about how united the business community would actually be once policy details are developed.

She said it's too simple to say that business is ready to sign on to an overhaul of the health care system, and pressed other speakers on what they regarded as the key obstacles to business support for such changes. Arensmeyer insisted that "small business owners will look at a solution if it is practical." And Bruce Bodaken, CEO of Blue Shield of California, said "mandates are not antithetical to the American way. We do it where the public good is served by such a thing."

But Dallas Salisbury, CEO of the Employee Benefits Research Institute, noted that employers in Massachusetts are hedging their bets about whether they ultimately will go along with the health care overhaul plan in that state hailed nationally as an example of what can be accomplished when all the players in the health care system are willing to compromise. That state's overhaul mandates employers to help fund coverage of the uninsured if they don't cover their workers, and employers are wary that funding demands could grow. Salisbury noted that employers in the state may yet go to court to overturn the Massachusetts plan on the grounds that its requirements are preempted by the Employee Retirement Income Security Act (ERISA).

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