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Eliot Daley

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Why Should Employers Control Health Care Benefits?

Posted: 03/01/2012 12:47 pm

Why should your employer have any say whatsoever about how you manage your reproductive health? Why? Can you think of one good reason? Your employer, of all people, influencing the most intimate decisions in your life -- could anything be more ridiculous?

Because it's all we have ever known in the U.S., we Americans think it normal for employers to be enmeshed in the provision of health care for their employees.

Few realize that this arrangement is both unique and absurd in comparison with other industrialized countries, where employers have absolutely nothing to do with health care. Nothing. Nada. Zip. Zero. Abroad, nationally funded programs enable private doctors and hospitals to care for one and all, unfettered by what any employer does or does not like -- just like Medicare, the most popular and cost-effective health care program in America.

People who feel insulted by the notion of the U.S. following anybody else's lead are quick to bad-mouth the national health programs elsewhere. And while one can find something to criticize about any of them, the fact is that they produce healthier citizens than our way does -- by a long shot.

The New England Journal of Medicine shows Americans floundering around in 37th place in terms of health status (e.g., mortality, life expectancy). Did you get that? Thirty-seventh place. Despite spending nearly twice as much per-person as the next most-costly nation's program.

Let's review the reasons why it is time to sever the connection between employers and health care.

First, the connection was simply an accident of history, rather than a carefully designed arrangement to provide the most cost-effective care possible for Americans. In the race to secure scarce labor right after World War II, employers (who were constrained by wage and price controls) offered health coverage as a fringe-benefit inducement for new hires. Our whole messy, expensive, ineffectual system evolved mindlessly forward from that moment.

Second, employers are burdened not only by paying for employees' health care but in maintaining the internal bureaucracy to manage those benefits. U.S. employers find it increasingly difficult to compete with non-U.S. companies because of the financial burden of covering employees' health -- even after their retirement, in many cases. What is more, the issue of health care coverage is a perennial aggravation to both employers and labor unions as they negotiate appropriate compensation; this bone of contention simply need not exist.

Third, the scattergun array of private payers who administer employers' coverage has failed miserably in their half-hearted efforts to bring sanity to their reimbursement policies. No wonder. When presenting a cost-saving idea to the medical director of one of the two largest private health insurers in the country, I was told bluntly and without embarrassment that saving money was not a concern of theirs, as they simply pass increasing costs along to the employers (and their co-paying employees) as increased premiums. They largely shell out whatever providers put on the bill, irrespective of the value any particular procedure or medication might have in restoring the patient's health.

By contrast, Medicare conducts extensive clinical research on the most cost-effective actions and tailors reimbursement accordingly. And what some call "Obamacare" is boosting this research dramatically. Medicare's purchasing power has proved to be vastly more effective in restraining costs than the feeble and inconsistent efforts of private payers, most of whom eventually just fall into line behind whatever Medicare is doing. If all they are doing is mimicking Medicare while adding costs as a for-profit middleman, why do we need them?

Fourth, if anyone still doubts the idiocy of the U.S. practice of issuing health care coverage through employers, these past days surely must have banished their doubts for good. While other industrialized countries serenely offer pre-paid healthcare for all their citizens irrespective of employment, we find ourselves the laughingstock of the world as we bicker over whether employees of Roman Catholic organizations can be denied employer-sponsored coverage for contraception.

And now, to make the matter even more ridiculous, Congress may soon be voting on a proposal to let any employer restrict any facet of coverage that doesn't happen to fit that employer's own idiosyncratic sense of morality and ethics. Where will this deepening entanglement of bosses with their employees' health matters ever end? And why would we even perpetuate it, let alone exacerbate the problem?

I have been an employer, and I can tell you that employers already have enough to worry about: solvency and profitability, competition, workforce capabilities, innovation, markets, product safety, and legitimate governmental protections like OSHA. Can't you just imagine the coast-to-coast whoosh of relief if employers awoke one morning to find the whole health care mishegas gone forever from their To-Do list?

And can't you just imagine the coast-to-coast whoosh of relief if the unemployed and the about-to-be unemployed all awoke that morning to find themselves members of Medicare for All? That's actually the best reason of all. No more terror of falling out of a job and into medical bankruptcy. No more being reduced to medical beggars cringing hopefully at the door of the Emergency Room. And for the employed, no more revealing your most sensitive medical situations to a fellow employee in the H.R. department as you grope for a pathway forward through the confusing coverages.

To be sure, Medicare for All means that some taxpayers will find their tax dollars supporting particular health care activities they may deplore (e.g., contraception).

But we citizens already do underwrite all manner of expenditures, from health care to warfare, that include elements certain individuals may personally object to. It's called democratic majority rule. Who better to define health care benefits for American citizens -- the American citizens themselves or their employers?

Americans on Medicare love it. Let's share those benefits with all Americans, and get a grip on runaway costs at the same time.

Why wouldn't we?

(For more on Medicare for All, check out http://www.medicareforall.org.)

 
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HUFFPOST SUPER USER
Robin Ferruggia
Life - for its own sake
01:10 AM on 04/05/2012
I agree - it's preposterous that you have your employer involved in your private affairs. The relationship between an employer and employee is not much different than between yourself and some business that sells you something. When you buy something all that matters is if you can pay for it, and if you can you get it, end of subject. If you want to sell your labor to an employer, it's the same thing. He's buying your labor and he has a right to know whether you can do the job or not, just like when you buy a product you have a right to know if it can do the job you're buying it for. But that's all. He has no right to anything more. I think when employers think they are entitled to more all it does is show how paranoid people are in this country, and goodness knows how the GOP plays on that.
10:14 AM on 03/15/2012
I've known executives who have sat around the table talking about medical procedures - subjects they have zero training in - trying to decide if they should allow certain treatments for their employees. How ridiculous is that? So if Jane can't get the treatment she needs from her employer, she ends up in the ER, paying (or not paying) four, five, six times as much. And she might not even realize that ER care is the most expensive care on the planet. http://whatstherealcost.org/video.php?post=five-questions
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LateDave
Where I - dreaming - lay amazed
02:07 PM on 03/02/2012
When the U.S. adopted health insurance and Canada rejected it ("drowning the kitten" as they describe it), what passed for medical care resembled, but was inferior to, what we now consider the standard for ordinary verterinary care, a term I have adopted from a paper by a U.S. doctor who toured Russia in the 1970s. If you were badly burned, you died. If you had a heart attack, you died. Car accident? Died. Diabetes? Died. Cancer? Died. High blood pressure? Stroke. Died. Extension of life by butchery/surgery was iffy. But it wasn't very expensive.

What now? Should we struggle on with a payment system that was adopted in the 1950s to compensate for wage and price controls? Or should we recognize that the situation is different, and develop a rational system for providing a decent life to all in view of the great leaps government sponsored and private research has made in all aspects of medical practice?

We have the examples of at least 37 national-health systems that produce better outcomes than ours. If it weren't for the PAC-sponsored hysteria defending profiteering and obstructing progress, we could already have had a solid system in place for almost 20 years. Maybe even the Nixon system--forty years.
oilfield
large employer per obamacare
12:22 PM on 03/02/2012
we have the best healthcare in the world...
folks with no insurance get care, folks with insurance get care....
anyone can go to the er....
i am one employer that wishes i didnt have to pay for it though, let 300 million consumers do that with whatever company they want to.
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HUFFPOST SUPER USER
Wayne Caswell
Consumer Advocate & Founder of Modern Health Talk
11:23 AM on 03/02/2012
This is the first time I've heard anyone associate employer-provided healthcare to US competitiveness and imply that removing that burden would spark investment and economic growth. Thanks.
11:19 AM on 03/02/2012
A couple of points in the article demand comment. First, the author cites that people in other countries are healthier (US ranks 37th in terms of health status) as evidence that our health insurance set up is inferior. There are other factors than health insurance in how long we live and how healthy we are -- the foods we eat, how much, exercise, etc. In fact, from a medical perspective the US has a vast majority of the best health care institutions in the world. Of the top 20 hospitals in the world, 17 are in the US. of the top 10 medical universities, 8 are in the US. Unless you make the case that the majority of the patients in those hospitals are non-Americans and the majority of the doctors leave the US, we are getting the best medical care in the world.

Second, the author alleges we are the laughingstock of the world over the contraception controversy. The only reason that would be the case is that the rest of the world does not have the history of freedom of religion in the constitutions as we have here and they therefore cannot appreciate the depth of the issue. It is not about contraception, but about freedom from government interference in religion. If an employer wants to provide a benefit that does not violate its beliefs, the government does not have the right to force them to provide the service. That is unique to the US.
12:47 PM on 03/02/2012
The basic crux of the argument is that the employer should not be in a position to have to make a choice about employee health coverage. Does this situation really make sense? Why should employers be a this predicament? Is that what you really want?

Aside from the fact that the current system is grossly inefficient and unfair, it is probably unsustainable in the long run. We don't cover enough of the population and the cost are becoming unmanageable. The current economic situation has highlighted the fact that when a person loses their job, they also lose their health coverage. Large groups of uninsured citizens only drives costs up that much more. Is this really a sensible outcome?

Sure, a large section of the population sees this as government control of a liberty, but common sense needs to intervene here. Health care cost are causing many companies to be uncompetetive world-wide and that cost is continually going up. The only solution left to us may be total government-run healthcare. Necessity will ultimately lead us to that end.
01:04 PM on 03/02/2012
I agree in principle that employers should not be in the middle providing health care insurance as a benefit. It does not follow however, that the government should therefore step in and do it. We should buy health insurance just like we buy other insurance -- car, home, life, short term disability, long term disability, etc. An individual should be able to buy the coverage he/she wants in the marketplace.

We actually cover the vast majority of the population, about 85% (and BTW studies indicate that most of those are happy with the care they get). If you factor out illegals (included in the studies that say 85% are covered), young people who willfully opt out, and people who are without health insurance only temporarily, the figure of those covered is much higher.
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HUFFPOST SUPER USER
Barbara Saunders
Writer, SF Bay Area transplant from NY
01:56 AM on 03/05/2012
Having top hospitals and medical universities does not provide good health. Without insurance or other resources, one cannot gain access to those institutions.
08:24 AM on 03/05/2012
We need to STOP paying a component of the healthcare stream that provides NO HEALTHCARE...the insurer. They sieve profits from the pool of money. No wonder there is nothing left for the TRUE providers of the healthcare. It all goes to the shareholders in the private insurance companies. I would much rather pay into the government plan and know that it strives to keep its overhead
02:23 PM on 03/05/2012
Then who gains access to those institutions? A bunch of foreigners? Only the "1%?" Go visit them and you will find regular Americans in these institutions because 85% of Americans have health insurance (and surveys indicate most are happy with their care) and the other 15% includes illegal aliens, young people who don't want health insurance, people without health insurance temporarily, etc.

The bottom line is that the vast majority of Americans have health insurance and are pretty happy with it. They are not happy with rising costs which needs to be addressed, but they tend to happy with the care.
11:19 AM on 03/02/2012
While I agree that employers shouldn't necessarily be the source of health care insurance, neither should the government. Replacing one large entity with another, and one that has proven to overspend and over bureaucratize, makes no sense at all. Why not buy health insurance like any other insurance, eg car, home, life, etc. Those insurances are bought from competitive companies and can move across state lines. Anything we can do to get the service closer to the person paying will help drive costs down.
11:08 AM on 03/02/2012
As an employer the author makes some good points. I would love to get rid of the responsibility. Is he comfortable with "majority rules" when he is in the minority? of courser not. The current system, even with Obamacare, doesnt work, but let's not be generous with medicare's results. They control costs by under cutting docs and that is then picked up by private insureds. As much as 8% of your monthly premium comes from that cost shifting, Also, the out of pocket expenses by medicare keep costs down for them. Let us all remember we pay into that program all of our working lives, pay a monthly fee for part B and spend $200 on a supplement to cover the expnses if you need healthcare.
Much like our education system, what you put into the system determines what you get out of it. We do run behind the world in many statistics regarding health, but medicare is not going to fix that either. Believe me when I say we do need to work to get everyone covered. We can't afford the young single person who doesn't pay into the system and then wants the coverage once they are sick.

I give the author credit for some good ideas, but we dont need more politics and the whim of the party in power to control the healthcare more than it is.Let's fix medicare long term before we expand it.
08:46 AM on 03/02/2012
If the health insurance package provided by any employer covers ANY medications for the employee, there should be NO carve out for birth control. I've practiced OBGYN for over 30 years. Ten years ago if a patient was ONLY using the pill for medical indications, I could write a letter stating specifically that SHE DOES NOT USE THE PILL FOR BIRTH CONTROL, state the medical condition, and then they would perhaps cover it. Of course if the women WAS MARRIED, the company would assume she was also using it for birth control, and not cover it. How ironic. I had a better chance of getting coverage for the pill for my patient if she was NOT married, simply stated she wasn't having sex, than for a married woman. For the last 10 years, this has become less an issue because more companies' policies would cover pills just as they covered all other medications. Now congress wants us to move BACKWARDS. Please get this point---BCPs and other forms of birth control are used MORE OFTEN by married couples to time and space their children in order to plan their finances, and give their children the best life they can. If this were about limiting the sexual activity of single women by preventing them from getting birth control, are we also to somehow limit the sexual activity of men? You can't legislate morality, but you CAN legislate equal access to a MEDICATION used for multiple reasons other than "birth control".
HUFFPOST SUPER USER
Rosalee Harris
08:20 AM on 03/02/2012
There is a part of me that really hopes this Blunt amendment pass just for conservatives to see when it goes into effect How DUMB their idea was. Because I really dont think they see it. They sit there and come up with these ridiculous ideas almost off the cuff just to play politics. Commonsense would tell you it would be a disaster to give employers the option to opt out on moral and religious ground. If that kind of faith in people was warranted they'd be no need for any type of regulation. If you could trust that people will do the right thing even when its hard there would be no need for government. Government exist because human beings are flawed and SELFISH individuals at their core.
08:13 AM on 03/02/2012
It's funny how this whole issue arises from the fact of price and wage controls. Everyone should keep in mind that whenever the government acts, there are unintended consequences...
07:46 AM on 03/02/2012
"U.S. employers find it increasingly difficult to compete with non-U.S. companies because of the financial burden of covering employees' health"

Exactly--universal health care would be the biggest job stimulus bill ever, leveling the playing field between small and large businesses and making US businesses more globally competitive. Too bad the politicians cannot see this. Even the big corporate donors cannot see this.
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HUFFPOST SUPER USER
A level Head
Who will protect us from the protectors
01:04 PM on 03/02/2012
They do not see it because it simply is not a true vision.

The COST of healthcare will not change -- If anything it will increase -- If for no other reason than 30 Million new insureds will enter the picture who are most likely not going to contribute to the cost -- Passing the cost right back to those who can not see the faulty vision.
07:58 AM on 03/05/2012
WHAT! Having 30 Million new insureds that heretofore thought they either did not need insurance or had no insurance from loss of job, and were healthy, would add MAJOR revenue and impact POSITIVELY on the system. Your ridiculous assertion just cannot be upheld.
07:14 AM on 03/02/2012
Loved my employer-provided insurance when I was working. Hate the medicare/supplement I have now that I'm retired. Spent over 12k in 2011 for meds/insurance/etc for 2 people.
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HUFFPOST SUPER USER
Carl Caroli
I just don't understand people
07:11 AM on 03/02/2012
"...Americans floundering around in 37th place in terms of health status ....Despite spending nearly twice as much per-person as the next most-costly nation's program."
But I'll wager we have the most profitable system. We Americans measure everything in dollars and cents, you know.
06:50 AM on 03/02/2012
You say

"-- just like Medicare, the most popular and cost-effective health care program in America... the scattergun array of private payers who administer employers' coverage has failed miserably in their half-hearted efforts to bring sanity to their reimbursement policies.. By contrast, Medicare conducts extensive clinical research on the most cost-effective actions and tailors reimbursement accordingly... Medicare's purchasing power... Americans on Medicare love it..."

You use Medicare a lot to argue that employers shouldn't be involved in health care insurance. Maybe or maybe not. I've bought my own for years so don't care. But if Medicare is your proofpoint, go back and check your facts. About 50% of the people on Medicare get their main health care insurance from their former employer. Ususally the employer requires the retiree or disabled former employer sign up for Medicare but the employer (or union) provides the main protection (because Medicare is terrible insurance and do not protect against medical catastrophe). Another 25% of opted for Medicare Part C, which Medicare describes as a "private option." 15% buy supplemental insurance to make up for the problems with Medicare. Less than 10% of us on Medicare love it enough to depend on it.

In addition, Medicare is administered by a "scattergun array" of private insurers.
07:52 AM on 03/05/2012
You are high if you think 50% of Medicare enrollees get their insurance through some form of COBRA. This number has to be so low as to be negligible. The thought that a retiree can afford a COBRA plan whilst being retired. Medicare of course is a catastrophe insurance. There is nothing that is not covered under Medicare in an emergency. Every physician is mandated to take it, or go through all manner of hoops to make sure their monies are segregated to the point that it is unfeasible to not take it, ergo, everyone takes it.
Also, the employer does NOT mandate that the employee take Medicare, the Government does. The rest of the numbers you are pulling out of your nether regions.
07:03 AM on 03/20/2012
@ somonaut

First reaction was not to respond to your ignorant statement but just in case anyone reads this in the future, I never said anything about COBRA. 50% of seniors get their healthcare insurance from their former employers as a benefit of their former employment there, not because they were laid off. You really need to think before you comment