Health Reform: What Should Business Do?

May 30, 2007

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A lot can happen between today and next November, but as of now Democrats stand a decent chance of taking the Presidency and solidifying their hold on Congress in 2008. The three major Democratic Presidential candidates have now revealed some or all of their proposals for health reform. (There’s a good summary here.) How should businesses be preparing for the possibility of change?

1. Recognize that change isn’t inevitable, but is possible.

Democrats may be underestimating the level of resistance reform plans will meet. So far each plan has something to commend it, but none is visionary or inspirational enough to draw the kind of public support that can’t be eroded by well-funded campaigns like the “Harry and Louise” ads of the 90′s or the AMA’s “no socialized medicine” efforts in the 1950′s. Still, the possibility of change under a Democratic administration is there, and many business people understand that the right kind of health reform could improve their bottom line and make them more competitive globally.

2. Study the plans and participate in the dialogue.

Business leaders should inject themselves into the reform dialogue in a meaningful way. That means studying the plans and finding one to support. Many have signed on with Andy Stern and the SEIU. Business leaders should also look carefully at the plan put forward by Sen. Ron Wyden, which would take employers out of the health financing business altogether. That’s a radical shift for larger businesses, but one worthy of consideration.

3. Find the details you support and promote them.

Sen. Clinton calls for a Best Practices Institute. That’s a good idea worthy of widespread support. So is her call for IT upgrades (a call that’s common to all the plans, but which she initiated first.  Obama has upped the ante by calling for $7 billion more in development than she has proposed.) Edwards was the first to call for public/private competition, which should drive down costs for employers and individuals. These details can dramatically affect the impact of reform on the business community.

4. Understand the potential impact of reform on your business.

Large employers are more likely to benefit from health reform that reduces the cost of coverage they already provide their employees. Reform plans would very possibly change the mix of plans they can offer, reduce the cost of catastrophic care, and place a greater emphasis on wellness. Large employers should look at their own health costs and model the impact of these changes – as a planning exercise, and for common sense. They should also avoid multi-year deals for insured coverage or reinsurance on a self-insured plan.

Small employers may be required to provide coverage under health reform, and should be preparing for this possible additional expense. The specifics of reform will determine who will be hit in the small business community, and how hard, and nobody’s offering that detail yet. I predict a boom for the PEO industry if small businesses are hit with a mandate – that is, assuming a mandate of that kind doesn’t become a last-minute boon for the Republican Party.

We’ll provide more detail on these plans as it becomes available – although the candidates have very little reason for making that detail available. Politically speaking, the devil’s in the details – so the less said, the better. It will be up to business leaders (and those in labor and elsewhere) to push discussion to a more detailed – and more meaningful – level.

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3 Responses to “Health Reform: What Should Business Do?”


  1. [...] Health Reform: What Should Business Do? [...]


  2. Thanks for the summary. Large employers and small employers are always different.

  3. arretaGak Says:

    Nice article, great looking website, added it to my favorites!


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