Michael Freeman is the executive vice president of the Healthcare Leadership Council, a coalition of executives whose mission is to improve America’s healthcare system. He is also a key contributor to “Cover the Uninsured Week,” an annual event sponsored by the Robert Woods Johnson Foundation. Cover the Uninsured Week is a national campaign that aims to draw attention to the plight of America’s 45 million uninsured citizens and discuss possible solutions to the problem. In this interview, Freeman discusses the event and how small business owners can provide employees with health coverage.
How many American workers are currently uninsured?
In 2003, there were approximately 45 million uninsured Americans. According to the Employee Benefits Research Institute, it is estimated that 26.6 million of that total are actual working Americans. At the Healthcare Leadership Council, we’ve done our own study that’s been widely cited. It found that 80 percent of the uninsured population consists of people who are in working households. In other words, they might not be the workers themselves, but they’re in a household where at least one person in the household is drawing a regular paycheck.
Are we starting to make any kind of progress on this issue?
There is some progress taking place. I had an article sent to me from the San Francisco Business Times dated the end of March that showed that small businesses offering healthcare benefits on the west coast went up from 54 percent last year in March to 66 percent this year. That’s a positive trend.
As we spotlight the problem and do a more effective job of giving information to small business owners, we believe that we can push that trend line upwards as far as small and midsized businesses offering health coverage.
What are the biggest obstacles to employers providing their workers with insurance?
The easiest answer to that question is cost, but to be a little more specific, based upon what we’ve learned in our own study of small business, it’s the perception of cost. We did some scientific survey work of small business owners and found that their perception of health insurance costs is in excess of actual costs. One of the biggest obstacles to employers providing insurance to their employees is information or the lack thereof.
Where might small business owners find resources to help them provide insurance to their employees?
That’s the big question, because the information is not readily accessible to them right now. The Small Business Administration has some information available but not a lot. What we’re doing right now to help through the Healthcare Leadership Council and Cover the Uninsured Week is assisting in taking this concept nationwide.
We’ve developed a pilot program called The Mean Street Initiative. What we’re doing at pilot sites in Pennsylvania and Virginia is going out and proactively providing small business owners with information on health coverage in that area – showing them what plans are available in their region, what those plans would cost them, and what the premiums would cost. This is something we believe needs to be expanded upon and done for all small business owners. The Robert Woods Johnson Foundation is helping to fund this project. During Cover the Uninsured Week, there will be small business seminars taking place all over the country to try and do more outreach to small business, but there definitely needs to be more of this.
Do these resources include information on things like professional employer organizations, things that allow businesses to pool resources and increase their buying power?
Yes, we do provide information on that. Also, if they are part of an industry association, it will most likely have an association-sponsored health plan, which can help them increase their purchasing power.
What are some steps that small businesses can take to control health insurance costs?
The most direct thing they can do is comparative shopping. There is competition in the health insurance market; and in any given region of the country, you can find a number of plans from which small business owners can purchase insurance – from HMOs to Preferred Provider Organizations to Point of Service Plans. There are a lot of options out there. So, small employers should shop for both quality and price.
Beyond that, a lot of business owners, big and small, are finding ways to cut their costs through employee education; taking steps to help employees live healthier lifestyles – to stop smoking, get more exercise, and eat right. Some are getting employees to take ownership of their own healthcare decisions, so that healthcare dollars are spent wisely doing things that are really necessary, such as taking steps to stay well. There are a lot of proactive steps that both business and employees can take to cut down on healthcare costs and at the same time have more effective healthcare.
Is there a return on investment for providing affordable health insurance to employees?
Absolutely. When you have the kind of preventive care that health insurance brings like comprehensive check-ups, prescription coverage, access to medical technologies, that means lower absenteeism and more people showing up for work healthy and productive.
Beyond that, health insurance is a factor in attracting and retaining quality employees. A business that offers health coverage is going to have an advantage over a business that doesn’t. The U.S. Department of Labor has done a study that shows that recruitment and employee turnover in small business accounts for 30 percent of salary costs. If you can offer an effective healthcare plan that cuts down on turnover, makes recruitment more effective, and reduces time spent replacing employees, your bottom line is going to reflect that in a positive way.