The Pro-business Argument for Single-payer Healthcare

Jan 17 2018
Lainey Newman
Harvard Political Review

In spring 2017, billionaire businessman Warren Buffett called the American healthcare system “the tapeworm of American economic competitiveness.” In other developed countries, healthcare is not an impediment to the business model—businesses don’t have to pay for it for their employees. In the United States, the opposite is true. Employers often pay big money to provide healthcare to their employees, decreasing the amount of capital the company has available to grow their business. Single-payer healthcare, a system in which universal healthcare coverage is provided to all citizens by the government, seems like the obvious answer for businesses to save money by avoiding healthcare costs. But Warren Buffett is one of the only large-scale businessmen to support single-payer healthcare.

In fact, the United States is the only industrialized, first-world country without universal healthcare. But as of June 2017, Pew Research found that 60 percent of Americans say that the government should be responsible for providing healthcare to all citizens. Yet corporations and businesses still largely oppose the effort, which poses a significant obstacle to successfully implementing a single-payer system in the United States. Policy solutions to the healthcare system require the support of all sectors, including private actors. Only by partnering with all can radical political change, such as the implementation of a new, government funded healthcare system, take place. With regard to health care, such change can be achieved if large companies join the public in demanding single-payer healthcare.

Health care and power

In Canada, the current single-payer system enjoys broad public and private support. Canada’s health care system evolved into single-payer throughout the 1960s and 1970s starting with the introduction of Medicare in 1962 and culminating with the Canada Health Act in 1983. In 1970, both the United States and Canada were spending approximately seven percent of their GDP on health care. In 2015, Canada spent approximately 10 percent of its GDP on health care, while the United States currently spends 18 percent per annum.

Spending in Canada is lower, and citizens enjoy public health care coverage. Though some complain about the wait times to see specialists, overall satisfaction with the system is around 86 percent, a strikingly high approval rating for a government-provided welfare program.

In the United States the figures in support of universal healthcare have the potential to be similarly favorable. For General Motors, historically one of the United States’ largest and most influential companies, providing health care benefits to employees tacks on an additional $1,500 to the cost of every car produced. In other industries too, companies face massively high healthcare costs for employees. Starbucks reportedly spends more on health care than on coffee beans.

Contrastingly, in Canada, the three largest American car producers—GM, Chrysler, and Ford—actually pushed to strengthen the Canadian single-payer health care system. However, unlike in Canada, companies in the United States, such as GM, have not come out in support of single-payer. In fact, GM Spokesperson Sherri Woodruff said in 2005 that the company “doesn’t advocate a single-payer system for the U.S.” This difference likely exists due to the American political climate and the power of the healthcare industry in the United States. Many companies do not want to attract gratuitous negative attention by advocating for radical, “socialist” change. The healthcare industry also controls a significant sector of the economy, with spending in the United States surpassing $3.3 trillion dollars every year. Companies fear private sector pushback from one of the largest U.S. economic players.

Mark Dudzic, the national coordinator of the Labor Campaign for single-payer, argues that one of the major reasons that corporations do not support single-payer health care is the complex power dynamics between employer and employee surrounding the issue of healthcare. People are scared of losing their healthcare coverage, and if it is provided by the company for which they work, the employer has additional power over the employee. In the American system, losing employment can mean not only losing income but also losing healthcare coverage, sometimes for the entire family. When healthcare is on the line, workers’ incentives to strike or bargain are lower. If Dudzic is right in his analysis, companies are willing to pay the extra costs of providing healthcare in order to have leverage against their own employees—a dynamic that is, at the least, troubling.

The pro-business argument

With the exception of companies no longer enjoying additional leverage against employees by providing them with healthcare, single-payer health care would be hugely beneficial to businesses. Such a system would support American businesses and the working class. Instead of paying a per employee premium, the business would pay a proportionally smaller tax to the government to offset the cost of single-payer coverage. One of the major problems with this idea is the political implications of suggesting a corporate tax. However, such a tax would actually decrease the explicit costs for U.S. businesses, by substituting for healthcare costs. For example, instead of GM charging an additional $1,500 per car to support employee health care, they would simply pay a minute fraction of production profits to cover universal health care.

The political implications of implementing a single-payer system are extensive. The healthcare industry in the United States represents about 15 percent of the economy, and national healthcare expenditures are over three trillion dollars. As it stands, the healthcare industry controls a massive lobbying force that advocates for private insurance to U.S. policymakers. Overcoming the strength of the healthcare industry would be almost an incomprehensibly difficult task.

However, large U.S. corporations have a great deal of influence over decisions in the political realm. If large companies like General Motors and Chrysler, which support single-payer healthcare in other countries, are able to rally support among the private sector and working class for the implementation of such a system in the United States, politicians may have an opening. Only through the collaboration of all public and private actors can truly progressive change, such as the implementation of a more efficient, publicly-funded healthcare system, take place.

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