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An Opinionated Perspective on Custom Manufacturing in America
By Greg Williams - July 2009
Is Health Care Reform Healthy for Small
Business?
If you own or manage a small business in this country
the current health care reform legislation moving through Congress probably
has your attention. After all, you’re going to be paying for a good chunk of the
outcome if things continue along the path they are now on. If you are like
me, that’s enough to make a person very nervous.
Manufactured wood products is an industry segment that
has been hit particularly hard by the economic crisis in the last 18 months
and recovery is only now starting to take hold for those businesses that
have survived. The last thing we need is another obstacle to recovery in the
form of mandated health care for employees, right?
Well, maybe and maybe not. There are two sides to this
issue and it’s not all bad for our industry if health care reform is done
correctly – but that’s still a big if at this point.
Employee health care is a real and growing problem for
our industry, and it needs to be addressed. If you provide health care for
your employees then you know that the costs and complexity of insurance are
out of control. If you don’t provide employee health care then you still
suffer related costs like higher workers compensation claims, decreased
production due to untreated employee health issues and lower retention of
quality workers.
There is also the issue of competing with foreign
imports. Being able to compete on a global basis is becoming an issue that
can impact even small shops in local markets. The National Association of
Manufacturers has documented that manufacturing businesses in this country
pay about 18% higher costs on average when compared to other countries in
the world. Some estimates for parts of the manufacturing industry go as high
as 30%. Costs related to employees are a major part of that inequity.
Fixing the health care system in this country could
potentially be a real benefit to our industry, if real affordable health
care is the result. What is currently being proposed falls short of that
mark, in my opinion, and it’s up to us to understand the issues and keep the
process moving.
Leaders in congress deserve credit for their efforts
that are constructive, such as striving for a viable public option as
leverage to bring meaningful reform to the private health insurance
industry. But they must resist the temptation to rush this important
process. Massive new programs seem to be the only option that are seriously
being considered, but is that the best option?
Consider the multiple health care programs that the
government already has in place. Even with all their faults Medicare,
Medicaid and the V.A. health care system still provide more care per dollar
of cost per patient than almost all private insurance companies. And
according to all the studies on this, the majority of patients under these
government programs are just as satisfied with the care provided as people
with private insurance policies. Most of these government programs are in
need of reforms and improvements anyway. Why not just fix these programs and
expand coverage instead of creating new ones from scratch?
Another question about the current reforms being
proposed to fix health care is whether or not we will be able to afford the
fix.
The funding strategies for current reforms are a major
issue. In my view, what is currently being proposed just won’t work. How can
new taxes and fees on small businesses, health insurance premiums and many
parts of the health care industry possibly help to lower the cost of health
care? Wouldn’t the best way to pay for health care reform and reduce costs
be to target the things that injure us and make us unhealthy?
So called “sin taxes” on alcohol and tobacco are
common. Why not expand upon that proven model to include taxes on foods high
in fat, sugar and salt to pay for health care? What about a surcharge on
speeding tickets and seat belt violations? Risk-based and unhealthy revenue
sources are plentiful and would spread the burden widely over the economy
while providing incentives for changing behavior that could ultimately
reduce the cost of health care by reducing the need.
But the public option and funding issues are far from
being the only provisions that need improvement.
Many problems with current health care reforms are
rooted in the fact that input from doctors in private practice and small
business owners, the business people who will be most impacted, has been
minimal. Politicians, lawyers, insurance executives and lobbyists for
special interest groups have dominated the development of the current
legislation.
This has not only skewed this legislation to
disproportionately burden small businesses but it has also left gaping
holes in the feasibility of current plans.
Serious reforms of predatory legal practices which feed
off the health care industry are non-existent. Reforms that would reel in
the one-sided policies and obscene profits of huge insurance and
pharmaceutical companies are inadequate. Incentives to grow and support the
type of care providers that will be required to meet the demands of the
aging American populace are missing. In order for health care reform
legislation to truly “reform” health care in this country, all these issues
must still be addressed.
Another problem is the timing. Hospitals, clinics and
doctors have been hit hard by the recession like other businesses, but
recovery of the health care industry is tied much more closely to employment
than Wall Street. Most of the time, a lost job means loss of health care
insurance, or lack of ability for the patient to pay for care. The costs of
charity care and unpaid fees for services that must be absorbed by health
care providers are at all time highs. The unemployment crisis needs to be
fixed before any heath care reform plan would have the best chance of
succeeding.
In talking with my doctor about health care reform, one
of his main concerns is that if the government doesn’t take the time to get
it right, fixing ill conceived regulations and problems with new layers of
bureaucracy after the fact will be extremely difficult. If history is any
indication, he’s got a valid concern.
Congress has taken some steps in the right direction,
but in my opinion they have a long way to go. If they intend to stop now and
make law with what they have, I believe the message from American small
business owners and those of us in the wood products industry should be
simply this:
Keep working. We need health care reform but what you
have now is the wrong plan at the wrong time.
This issue is too important to all of us to let it be
driven primarily by huge special interests and political ideology. Whether
you agree with my views on this issue or not, your voice needs to be heard
before the current legislation moves forward. The good news is that the ear
of your Senator (or at least their staff) is as close as your computer
keyboard. Below is a link that will put you in touch with your elected
officials right now. There has never been better time for your views to make
a difference.
http://www.senate.gov/general/contact_information/senators_cfm.cfm
Read the previous article on
The Road: Cap and Trade: The Demise of Small Custom Manufacturing in the
American Wood Products Industry.
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