Government-run health care is bad for business – Pacific Research Institute

Government-run health care is bad for business

The Kaiser Family Foundation recently surveyed more than 300 companies with more than 5,000 employees — and found that 83% believed that “a greater government role in providing coverage and containing costs would be better for their business.”

They’re gravely mistaken. A health care system that features even more government control than the status quo would mean higher taxes and bigger recruitment challenges for companies — not to mention lower-quality care for their employees.

Government could tighten its grip on our health care in many ways. The Biden administration and Democratic leaders in Congress are advocating for price controls on pharmaceuticals and a “public option,” a government-run insurance plan that’d “compete” against private plans. That competition would be on an unlevel playing field, of course, since the government plan could weather indefinite losses.

The party’s progressive wing, meanwhile, is calling for a “Medicare for All” system that’d ban private coverage entirely and enroll everyone in the same government-sponsored plan.

Paying for such programs would require significant corporate tax increases. Executives presumably realize as much, yet still think they’ll come out ahead. But there are other costs they’re not considering.

Take the cumulative billions of dollars in lost productivity that result from ineptly managed government-run health systems. I grew up in Canada, which has a government-run system very similar to the one proposed by Sen. Bernie Sanders, Vermont independent,  Rep. Pramila Jayapal, Washington Democrat, and other progressives.

To control costs, bureaucrats ration care. The median wait time to see a specialist in Canada following referral by a primary care doctor is more than 22 weeks, according to a study from the Fraser Institute, a Vancouver think tank. Canadians wait an average of 469 days longer than Americans before they gain access to new pharmaceuticals.

Over time, the toll of untreated pain and illness affects workers’ mental health, not just their physical health. The Fraser Institute calculated the cost of lost productivity during the workweek due to Canada’s wait times at $2.8 billion in 2020.

A greater role for government in health care would also deprive American businesses of an important tool for recruiting and retaining workers. In the United States, a majority of Americans get their health coverage through employers. People don’t pay income tax on the value of those benefits. And because the cost of health care has outpaced inflation for years, the value of that tax break has grown significantly.

The employer-sponsored insurance status quo is not ideal. A more rational system would allow individuals to shop for health insurance coverage just as they do for auto or homeowner’s policies. Individuals should have the power to select health insurance that meets their needs, rather than their employer’s — and do so on equal tax footing.

But there’s no denying that the current system is a powerful recruiting tool for employers. Nearly half of workers with employer plans say that health benefits played a role in their decision to take a job, according to a recent survey conducted by America’s Health Insurance Plans, a trade association. Almost six in 10 say it’s influenced them to stay with their current employer.

If government takes over health care the way some lawmakers envision — and some corporate executives seem to welcome — businesses large and small will pay a steep price.

Sally C. Pipes (@sallypipes) is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). 

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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