Health Policy Program
 

Health Costs Put U.S. Firms at Competitive Disadvantage

A New Report Quantifies the Employer Health Care Burden

May 7, 2008 -- Although most Americans get health insurance through their employers, business leaders are increasingly united in their belief that rising health care costs threaten America’s competitiveness in the global economy. Business support for comprehensive health reform has been growing as a result.

However, economists generally believe that it is workers -- rather than employers -- who pay for health care through lower wages. Although this proposition may hold true in the long run, employers face a variety of constraints that may make it difficult for them to fully shift health costs in the short run.

Health care costs would not burden firms if they could be shifted to consumers through higher prices. But with globalization and increased competition in international markets, this is not feasible. If employers cannot fully shift health costs onto workers or into prices, then how much they pay matters.

As a percentage of payroll, the employer cost of health benefits has exploded over the past few decades. In addition, employer health costs for manufacturing firms in the United States, $2.38 per worker per hour, were much higher than the foreign trade-weighted average of $0.96 per worker per hour in 2005. Employer health costs make the United States less competitive than it could otherwise be.

A new model for health care that: reforms the current insurance marketplace; provides income-based subsidies; and is individual, rather than employer-based, would enable us to finance our 21st-century health system in a more sustainable and competitive way.

For the full text of the policy paper, please click here. A shorter issue brief outlining the employer health care burden is also included here.

About Us

The crisis in America’s health care system stems from three primary causes: spiraling costs; highly uneven quality; and inequitable access to care that leaves 47 million Americans uninsured. The Health Policy Program works at the national level and in California to achieve fully portable health insurance to all Americans while raising the average quality of care and lowering the rate of cost growth. More specifically, the Program promotes a mandatory, citizen-based approach to health insurance that, combined with credible cost containment measures, can ensure universal coverage and enhance America’s long-term economic and social well-being.

A more-detailed program description is available here.

Be sure to visit our New Health Dialogue blog.

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Cost of Failure: Report Shows Failure to Reform Health System Costs U.S. Economy as much as $204 Billion a Year

March 26, 2008 -- The diminished health and shorter lifespan of the uninsured cost the U.S. as much as $204 billion a year, according to a new report released today by the New America Foundation. The report is based on the Institute of Medicine's widely-respected 2000 study that linked economic losses to a lack of health insurance.

To read the report, click here.

Julie Barnes Addresses Association of Health Care Journalists

Julie Barnes, Deputy Director of the Health Policy Program at the New America Foundation, recently addressed the Association of Health Care Journalists at their annual conference. Barnes was featured on a panel about prospects for national health reform moderated by USA Today’s Julie Appleby.

To view a webcast of her panel, click here.

Len Nichols Addresses AHIP National Policy Forum

March 4 -- Today, Len Nichols, Director of the Health Policy Program at the New America Foundation, addressed the American Health Insurance Plans (AHIP) 2008 National Policy Forum. Nichols was featured on a panel, Expanding Access to Health Insurance Coverage: Economists’ Perspectives, which considered possible solutions to our nation’s health care crisis. For Len’s PowerPoint presentation, please click here.

 

New America Foundation Applauds Bipartisan Health Reform Effort

February 12, 2008 -- The New America Foundation today applauds Representatives Jim Langevin (D-RI) and Chris Shays (R-CT) for their bipartisan efforts to create a sustainable system of health coverage for all Americans. Langevin and Shays recently introduced health reform legislation that will cover all Americans through a system similar to the one that federal employees use to get their health insurance. For more information on the American Health Benefits Plan (AHBP) plan, click here.