Do we really want a universal system?

The debate over Healthy Wisconsin, the proposed plan that would fundamentally transform the delivery of health care in the state into a universal care system, is white hot these days. With the plan, rather than paying premiums to insurance companies, all employers instead would pay a new 10.5-percent tax on their employees’ Social Security wages to the state. Instead of buying insurance directly or contributing toward a share of a premium, consumers would be assessed a fee of 4 percent of their Social Security wages.

A public/private entity would then allocate that money to private health care networks that service different parts of the state. The enrollments in the networks would be driven by consumer preferences.

That capitalistic component of consumer choice makes the Wisconsin plan different than the Canadian universal health care plan, according to state Rep. Jon Richards (D-Milwaukee), a co-author of the Wisconsin initiative.

However, the critics of the Wisconsin proposal are many, and they are well-heeled. They include many of the players in the current system, such as insurance companies, brokers and consultants. They include doctors. They include hospitals.

They include various business associations such as the Wisconsin Manufacturers & Commerce (WMC) and the National Federation of Independent Businesses (NFIB) of Wisconsin.

“Small businesses and start-up businesses have provided virtually all growth in state employment for several years. Larger businesses have actually lost employment in the state. Many of these small businesses could not survive if forced to provide health benefits through a state tax system. This would result in a loss of current employment and future employment opportunities,” said Richard Blomquist, president of Blomquist Benefits LLC, who studied the Wisconsin plan for the Independent Business Association of Wisconsin

The critics say the program is nothing more than a new $15 billion tax. They contend that Healthy Wisconsin would be a government-run program that could only inflate the bureaucracy and the inefficiencies of the current system. Instead, they are crying out for more consumer-driven care, such as health savings accounts (HSAs).

Conversely, proponents of Healthy Wisconsin say the current system is bloated and inefficient.. They say there is no cost transparency to enable true consumerism in health care in the current system. They say consumers and businesses in the state already are paying for the costs of providing care for the uninsured and the under-insured, because those costs are transferred onto those who can pay.

They say small businesses that are providing insurance for their employees should not have to pay taxes to subsidize care for the employees of large companies, such as Wal-Mart Stores Inc., that do not.

They say that instruments such as HSAs require co-pays that are so high that the typical middle-class family cannot afford to pay them when serious illnesses strike.

They point to the fact that medical bills have become the leading cause of consumer bankruptcies in the country. They say it simply is un-American for people to work their whole lives, only to lose everything because their spouses become sick.

Indeed, the American health care system is reaching a tipping point. According to Tom Lerche, Aon Corp.’s health care practice leader, more employers are recognizing that simply shifting the rising medical costs onto employees is not an effective long-term solution.

“It’s a good short-term solution, but after several years of doing that, employees have higher contributions, but it hasn’t reduced or stabilized health care spending. At worst, it’s devalued the health benefit,” Lerche said in the latest HR Bulletin published by Diversified Insurance Services Inc. in Waukesha.

Shifting medical costs to employees is not a sustainable strategy, according to Gary Kushner, futurist and president of Kushner & Co.

“There is a point at which you can no longer shift costs to employees. By 2017, total benefit costs will approach 65 percent of pay, driven by health care trends and an aging workforce. A growing number of employers will be paying more for benefits per employee than they’re putting into workers’ paychecks,” Kushner said in the HR Bulletin.

The calls for reform are seeping across party lines, they’re becoming louder and they’re becoming more diverse. Earlier this month, in an SBT Milwaukee Biz Blog, Joe Leean, a former businessman who served as a Republican state senator from Waupaca and served in Republican Gov. Tommy Thompson’s administration as secretary of the Department of Health and Family Services, challenged his fellow GOP members to embrace the Healthy Wisconsin or come up with better ideas of their own.

No less than California Republican Gov. Arnold Schwarzenegger recently unveiled a $12 billion universal health coverage plan that would force nearly all Californians to buy insurance, while requiring insurers to accept all customers, even those with pre-existing conditions. Under Schwarzenegger’s plan, businesses that do not provide coverage to their employees would pay 4 percent of their payrolls into a state fund to subsidize those who cannot afford to buy insurance.

Many reform proponents point to the universal health care system in Canada as a model that could be emulated.

After all, in 2004, per-capita spending for health care in the United States was $6,096, more than double that of Canada’s $3,038. And for what? Canada has a longer life expectancy and a lower infant mortality rate than we have here in the United States.

Which leads us to the point at hand: What about the Canadian universal health care system? Is it more efficient? Does it provide equal or better quality of care? Are the waiting times for care much longer than those of a private system? Bottom line – is it working better than the American system?

As the debate continues to unfold, SBT set out to find the answers to those questions in this special report, which examines the realities of the Canadian health care system and explores the experiences of our readers’ Canadian counterparts – the owners and managers of privately held businesses in Canada. We set out with no agenda but to help our readers (and ourselves) learn more about the real-world experiences – both good and bad – of Canada’s universal health care system.

We encourage our readers to take off their political blinders and ponder the realities – both good and bad – of a universal system.

 

 

The great debate
The Healthy Wisconsin plan, which was crafted by a bipartisan panel that included a variety of medical, business and labor interests, would reform how health care is delivered and financed in the state. For additional information about the plan, visit www.healthywisconsin.net, and for more about the debate over the plan, visit the Milwaukee Biz Blog at www.biztimes.com.

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