Healthcare – Focus on Market-Based Reforms

The Small Business Association of Michigan’s (SBAM) position on healthcare issues recognizes the important economic role that small businesses play and the current status of healthcare issues in the United States.
Historically, SBAM (as an organization of small businesses) has favored incremental market-based reforms that encourage participation of consumers and purchasers. As one of the nation’s largest small company group-purchasing programs, our experience and those of other small business organizations show that many of the access, and some affordability, problems can be addressed through market-based reforms. If we are serious about reform, we must be dedicated to the empowerment of the people who pay the bills—the customers.

We believe that much good could come through a package of reform that includes four key areas:

1. Cost controls There’s great potential in implementing electronic medical records and e-prescribing, as well as reducing waste, fraud and abuse. It would also be helpful to provide comparative data on health costs, success rates, infection, morbidity and mortality rates inside facilities.

2. Individual responsibility SBAM supports an individual mandate as a way to reduce costs by getting those that should be insured into the risk pools. No more waiting until you are sick to buy insurance or push costs to the insured.

3. Insurance reform This includes moving to guaranteed issue with limited or no pre-existing conditions, and very strict rules around re-underwriting or recession of a plan.

4. Medical malpractice/tort reform Here we are not only talking about the cost of medical malpractice insurance and the awards granted by juries but also, just as important, the billions of dollars spent annually on defensive medicine.

We believe that taken as a package, these four steps could significantly reduce the cost of insurance for small businesses and individuals.

Now, assuming you agree with that statement, why is more not being done? Or better yet, why have we as a nation been struggling with this question for the better part of 20 years? Well, here is one Washington insider’s take on this issue. As you read through these statements, think about what you are hearing from the President, Congress and varying special interests across the spectrum:

– The United States healthcare system is so complex that a two- to five-year period of discussion is not long enough to achieve a successful policy solution to most problems.

– The ideological positions of the Republicans and Democrats are so opposed and so strongly held by lawmakers that few can accept as valid a compromise bill that would use elements of both positions to address a problem.

– The power of competing industry, consumer and other interest groups in our money-dependent political system is so strong that no compromise bill is acceptable if it can be perceived by one interest group to give greater weight to the concern of other competing groups.

– Because some health issues poll strongly with voters, members of one party—usually the minority party—prefer to keep the issue alive to attract voters in an upcoming election rather than seeing a limited measure enacted into law.

– There is a general unspoken agreement that it is not important to produce actual law on some matters; simply keeping the issue on the burner with ongoing discussions between lawmakers and interest groups can lead to real-world changes that make a difference that are market-driven, not government-driven.

– Despite grousing by some, the country’s healthcare system has no problems major enough to warrant large, federally driven solutions.

– Policymakers who are deeply concerned about the outcome of a given issue fear that once it has been dealt with through a modest consensus measure, the probability that Congress will revisit the matter to craft a larger scale solution drops to near zero.

– Washington policymakers see the public largely favoring government inaction over action.

– It is easier to agree on nothing than something.

These observations are as true today as they were nearly nine years ago when spoken by Joe Karpinski, who at the time was a spokesperson for Sen. James Jeffords (R-Vt). Karpinski was quoted in Medicine & Health Perspectives, January 1, 2001. It is frightening to think about how long this debate has gone on and how little has changed.

Scott Lyon is vice president of small business services at the Small Business Association of Michigan (SBAM). Feel free to share thoughts with Lyon on the above at








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