Health care’s bottom line

Posted July 07, 2009, at 6:37 p.m.

Imagine you own a business that employs 25 people. Imagine, also, that the president and a majority of Congress came to you and pledged to reduce and stabilize a major, annual cost of that business. Which cost would you pick? Energy? Hiring, training and retention? Shipping? IT, computers and telephones?

For many businesses, the cost of providing health insurance to employees would top the list.

In the national debate on how to reconfigure the health care payment system, the impact of increasing costs on business has been largely overlooked. Covering the 45 million Americans who currently do not have health insurance is important, but so is easing the burden on private business which has, for most of the last 50 years, carried the bulk of the cost of that insurance.

And this is another important reason why the so-called public option — a government-run payment system — should be part of the reconfigured system. It’s true that one segment of the business world would be hurt — the for-profit health insurance companies. But if insurance costs could be reduced and contained, almost every business in the country would have more capital to invest in equipment, product and service development, advertising and marketing, training and more.

Cutting health insurance costs — like cutting any other business cost — immediately goes to the bottom line. That is, for every thousand dollars saved in expense, profits go up by $1,000.

How much cost are we talking about? In response to a request from the BDN, the Bangor Region Chamber of Commerce solicited some of its members to reveal, anonymously, how much they pay for health insurance. A business with seven full-time employees — five are individual plans, two are family plans — pays $51,600 a year. Another with six full-time employees pays $23,600 each year. A business with 35 employees pays $244,260 annually — that’s $20,355 each month. And a business with 57 full time employees pays $400,000 each year.

If a viable public health insurance option were available, consider what that would mean for the seven-employee business and the 35-employee business. If larger businesses pick up most of the cost, through taxes, of the public option, then the local businesses would have most of $51,600 and $244,260 to invest elsewhere. Or keep as profit.

Setting aside the disingenuous charges of socialism and the scare tactics that inaccurately describe scenarios where the government is running hospitals and physician offices, health care finance reform helps business.

Publicly, you may hear business owners shaking their heads and clucking about the horrors of a public health care payer, but privately, they may already be counting the savings.

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