HEALTHCARE reform in California is at a potential turning point: Business has taken a seat at the bargaining table.
Some members of the state's new business vanguard participated at Gov. Arnold Schwarzenegger's healthcare summit last week. Steven Burd, chief executive of Safeway Inc., talked about his company's rising health insurance spending and said it usually takes a crisis to bring about change. Calling healthcare costs a crisis, he urged business to get involved.
Business cooperated early in President Clinton's campaign to reform the nation's healthcare system in the beginning of the 1990s. But many employers came to fear the politicians, worrying that reforms would be financed through new business taxes and costly regulations. Since then, they have routinely opposed major health-coverage proposals and shied away from broader discussions on reform. Instead, companies have focused on managing costs, which often means dropping coverage altogether. From 2000 to 2004, the percentage of California workers covered by employer-based insurance dropped from 59% to 55%.
Business is rejoining the healthcare debate for a variety of reasons. Among them are the rising costs of health insurance (between 2000 and 2004, the employer share of premiums jumped about 60%); the competitive disadvantage of ever-rising health insurance costs in an expanding global marketplace; the increasing ranks of the uninsured, whose treatment costs in California typically boost employer premiums by 10%; and sincere interest in helping employees stay healthy.
Most of all, however, business fears politics. In other words, healthcare reform could happen "to" it instead of "with" it. Polls consistently show that California voters support the idea that employers should be required by law to provide insurance to their workers.
The potential costs of remaining on the sidelines are mounting, especially with labor pushing for more health insurance coverage for workers. The city of San Francisco is set to implement a plan next year that would rely heavily on a new tax on business to give its 82,000 uninsured residents better access to healthcare. Statewide, business narrowly defeated a 2004 labor-backed initiative that would have forced medium-sized and large employers to provide health insurance. And although a judge struck down a Maryland law that would have required Wal-Mart to spend more on health insurance, the state's action was a wake-up call for business.
