HEALTHCARE AND BIG BUSINESS....The single biggest problem with having insurance companies involved in a national healthcare plan is adverse selection. If the government pays, say, a flat $5,000 per person, insurance companies have a huge incentive to sign up only young, healthy people who are likely to rack up less than $5,000 per year in medical bills. Older, sicker people will find themselves out of luck. This is what makes the healthcare industry fundamentally different from the cell phone industry or the soda industry.

Zeke suggests several solutions to this problem here, but also admits that it needs more research. I'm inclined to leave it at that for the moment because I don't want to spend this entire healthcare conversation talking about insurance companies. For now, I think we all agree that it's a real problem that doesn't yet have a perfect solution.

Instead, I want to ask Zeke about something else. In his Monthly article, he suggests that big business is ready to support universal healthcare:

The turnaround of the attitude of business towards reform is one of the biggest changes from 1994 and the first health-care fight....Since 2000, health-care costs have risen dramatically, breaking the backs of companies, and there are no more savings to wring out of the current system....Nearly half of 1,400 chief financial officers surveyed by Robert Half Management Resources said they expected health care to account for the biggest increase in their cost of doing business over the next year. Removing these costs from their balance sheets and restoring a measure of predictability to wage and benefit costs would be irresistible to businesses.

This is music to my ears, since I've long thought that universal healthcare will become a reality only when large corporation finally get tired of the healthcare fight and decide that they'd rather hand off the problem to the federal government.

And as Zeke says, this makes perfect sense. What corporation wants to be in the healthcare business? It's a cost nightmare, it's an administrative nightmare, it's a recruiting nightmare, and it puts them at a disadvantage compared to foreign competitors who don't have healthcare costs. A level playing field — not to mention the simple relief of getting rid of a huge source of aggravation — should be irresistible.

But as Matt Yglesias points out today, a lot of people have thought the same thing in years past and come to ruin. It may be irrational, but big business continues to fight the idea of national healthcare anyway.

So here's my next question for Zeke: do you really think the attitude of big business toward national healthcare is about to go through a sea change? I've been on the lookout for signs of this for years, but so far I've seen only the faintest of glimmers. Have you actually presented your ideas to large corporations and gotten genuinely enthusiastic responses? Are any major business lobbies open to supporting a national healthcare plan? As Matt says, "If this plan is so business-friendly, where's the business support?"

—Kevin Drum 1:43 PM Permalink | Trackbacks