COST: CEOs Concerned about Health Care Costs

Recently, the Business Roundtable, an alliance of CEOs who companies provide more than 35 million Americans with health insurance coverage, released a report adding to the evidence that the  U.S. health system is in trouble. And it's causing trouble for business. Paying for health care, the group said, was seriously hurting the ability of U.S. firms to stay competitive in the global marketplace.

Weighted against leading economic competitors, the United States spends more and receives less value than both G-5 countries (Canada, Japan, Germany, the United Kingdom and France) and emerging industrial BIC countries  (Brazil, India, and China). On average, U.S. workers and employers receive 23 percent less value from our health care system than G-5 workers and employers, and 46 percent less value than Brazil, India and China. For every dollar spent on health care by U.S. firms, G-5 firms spend only 63 cents, and BIC countries spend just 15 cents. Per capita, the United States spends $828 more per person than G-5 countries and $1,654 more per person than BIC countries. Despite paying much more, the Business Roundtable reports that the U.S. does not have a healthier workforce.

The Business Roundtable is not the only group concerned over the strain that health care costs place on both employers and employees. Previously, we at the New America Health Policy Program have explored the comparative effects of health care costs on U.S. firms and their foreign competitors through our policy paper, Employer Health Care Costs in a Global Economy. Ultimately, health care costs cause a competitive disadvantage to U.S. firms, force employers in the U.S. to cut health benefits to their employees, and sends "good jobs" overseas. The business leaders and stakeholders who make up the Health CEOs for Health Reform also see an urgent need for health care reform.

Business Roundtable CEOs are now advocating for health care reform. Though they are all strong believers in the benefits of the market, Ivan Seidenberg, the Chairman and CEO of Verizon, has stated that the very nature of problems within the U.S. health care system mean that the health care market doesn't function as a market at all. Seidenberg also argues that "true reform of the health care system must emerge from the uniquely American principles that drive our economy: competition, innovation, choice and a market that serves everyone."

Reducing the health care burden to both employers and employees is an essential part of health care reform. Having business leaders make that case may help keep reform within our reach.