Phil Galewitz, Senior Correspondent, covers Medicaid, Medicare, long-term care, hospitals and various state health issues. He has covered the health beat for more than two decades. He is a former board member of the Association of Health Care Journalists. Originally published at Kaiser Health News.
EASTON, Pa. — Walk into a big-box retailer such as Walmart or Michaels and you’re likely to see MCS Industries’ picture frames, decorative mirrors or kitschy wall décor.
Adjacent to a dairy farm a few miles west of downtown Easton, MCS is the nation’s largest maker of such household products. But MCS doesn’t actually make anything here anymore. It has moved its manufacturing operations to Mexico and China, with the last manufacturing jobs departing this city along the Delaware River in 2005. MCS now has about 175 U.S. employees and 600 people overseas.
“We were going to lose the business because we were no longer competitive,” CEO Richard Master explained. And one of the biggest impediments to keeping labor costs in line, he said, has been the increasing expense of health coverage in the United States.
Today, he’s at the vanguard of a small but growing group of business executives who are lining up to support a “Medicare for All” national health program. He argues not that health care is a human right, but that covering everyone with a government plan and decoupling health care coverage from the workplace would benefit entrepreneurship.
In February, Master stood with Rep. Pramila Jayapal (D-Wash.) outside the Capitol after she introduced her Medicare for All bill. “This bill removes an albatross from the neck of American business, puts more money in consumer products and will boost our economy,” he said.
As health costs continue to grow, straining employer budgets and slowing wage growth, others in the business community are beginning to take the option more seriously.
While the influential U.S. Chamber of Commerce and other large business lobbying groups strongly oppose increased government involvement in health care, the resolve of many in the business community — especially among smaller firms — may be shifting.
“There is growing momentum among employers supporting single-payer,” said Dan Geiger, co-director of the Business Alliance for a Healthy California, which has sought to generate business support for a universal health care program in California. About 300 mostly small employers have signed on.
“Businesses are really angry about the system, and there is a lot of frustration with its rising costs and dysfunction,” he said.
Geiger acknowledged the effort still lacks support from any Fortune 500 company CEOs. He said large businesses are hesitant to get involved in this political debate and many don’t want to lose the ability to attract workers with generous health benefits. “There is also a lingering distrust of the government, and they think they can offer coverage better than the government,” he said.
In addition, some in the business community are hesitant to sign on to Medicare for All with many details missing, such as how much it would increase taxes, said Ellen Kelsay, chief strategy officer for the National Business Group on Health, a leading business group focused on health benefits.
Democrats Propel the Debate
For decades, a government-run health plan was considered too radical an idea for serious consideration. But Medicare for All has been garnering more political support in recent months, especially after a progressive wave helped Democrats take control of the House this year. Several 2020 Democratic presidential candidates, including Sens. Bernie Sanders and Elizabeth Warren, strongly back it.
The labor unions and consumer groups that have long endorsed a single-payer health system hope that the embrace of it by employers such as Master marks another turning point for the movement.
Supporters of the concept say the health system overall would see savings from a coordinated effort to bring down prices and the elimination of many administrative costs or insurance company profits.
“It’s critical for our success to engage employers, particularly because our current system is hurting employers almost as much as it is patients,” said Melinda St. Louis, campaign director of Medicare for All at Public Citizen, a consumer-rights group based in Washington.
Master, a former Washington lawyer, worked on Democratic Sen. George McGovern’s presidential campaign before returning to Pennsylvania in 1973 to take over his father’s company, which made rigid paper boxes. In 1980, he founded MCS, which pioneered the popular front-loading picture frame and steamless fog-free mirrors for bathrooms. The company has grown into a $250 million corporation.
Master frequently travels to Washington and around the country to talk to business leaders as he seeks to build political support for a single-payer health system.
In the past four years, he has produced several documentary videos on the topic. In 2018, he formed the Business Initiative for Health Policy, a nonprofit group of business leaders, economists and health policy experts trying to explain the financial benefits of a single-payer system.
Dan Wolf, CEO of Cape Air, a Hyannis, Mass.-based regional airline that employs 800 people calls himself “a free market guy.” But he also supports Medicare for All. He said Master helps turn the political argument over single-payer into a practical one.
“It’s about good business sense and about caring for his employees and their well-being,” he said, adding that employers should no longer be straddled with the cost and complexity of health care.
“It makes no more sense for an airline to understand health policy for the bulk of its workers than for a health facility to have to supply all the air transportation for its employees,” he said.
Employers are also an important voice in the debate because 156 million Americans get employer-paid health care, making it by far the single-largest form of coverage.
Master said his company has tried various methods to control costs with little success, including high deductibles, narrow networks of providers and wellness plans that emphasize preventive medicine.
Insurers who are supposed to negotiate lower rates from hospitals and doctors have failed, he added, and too many premium dollars go to covering administrative costs. Only by having the federal government set rates can the United States control costs of drugs, hospitals and other health services, he said.
“Insurance companies are not watching the store and don’t have incentives to hold down costs in the current system,” he said.
Glad The Boss Is Trying To Make A Difference
What’s left of MCS in Pennsylvania is a spacious corporate office building housing administrative staff, designers and a giant distribution center piled high with carton boxes from floor to ceiling.
MCS pays an average of $1,260 per month for each employee’s health care, up from $716 in 2009, the company said. In recent years, the company has reduced out-of-pocket costs for employees by covering most of their deductibles.
Medicare for All would require several new taxes to raise money, but Master said such a plan would mean savings for his company and employees.
MCS employees largely support Master’s attempt to fix the health system even if they are not all on board with a Medicare for All approach, according to interviews with several workers in Easton.
“I think it’s a good idea,” said Faith Wildrick, a shipper at MCS who has worked for the company 26 years. “If the other countries are doing it and it is working for them, why can’t it work for us?”
Wildrick said that even with insurance her family struggles with health costs as her husband, Bill, a former MCS employee, deals with liver disease and needs many diagnostic tests and prescription medications. Their annual deductible has swung from $4,000 several years ago to $500 this year as the company has worked to lower employees’ out-of-pocket costs.
“I’m really glad someone is fighting for this and trying to make a difference,” said Wildrick.
Jessica Ehrhardt, the human resources manager at MCS, said the effort to reduce employees’ out-of-pocket health costs means the company must pay higher health costs. That results in less money for salary increases and other benefits, she added.
Asked about Medicare for All, Ehrhardt said, “It’s a drastic solution, but something needs to happen.”
For too long, Master said, the push for a single-payer health system has been about ideology.
“The movement has been about making health care a human right and that we have a right to universal health care,” he said. “What I am saying is this is prudent for our economy and am trying to make the business and economic case.”
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
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It is another way of saying that private health care (insurance) has become a blood-sucker for the rest of the economy. Another example of the finance-insurance complex as a parasite instead of a service.
Out of pocket medical expenses is medieval.
given that economics is generally considered a most rational way of viewing the world, how has this idea not been obvious for some time?
$700 to $1200 per employee in just a few years?
the “employer based” system has never made sense to me, using their own criteria.
and they say the Left is utopian.
My health care payments (for a family of 5, medical/dental/vision) through my employer went from $273/month in 2014 to nearly $1100/month in 2019.
Different employers, similar sized companies.
From the Business Initiative for Health Policy website, check out this article:
https://businessinitiative.org/joe-bidens-zero-empathy-campaign/
This is more important than it might seem at first glance. If small businesses get on board in any kind of substantial numbers, then you make it acceptable for republicans to come out in favor of it.
I hope bernie and warren are gathering up more smallish employers like this and building a base of support. When you have splits in the business elites, that opens the door to progress.
Those who know their history know it was important to have the oil industry supporting Glass-steagall financial regulation.
Also note the support from Cape Air, a Massachusetts based business. This is a state where the hospital lobby dominates the landscape. It illustrates matt stoller’s frequently made point that the focus needs to be on cost control, and that there’s a risk medicare could end up like the pentagon, with its opacity and massive cost overruns.
“He said large businesses are hesitant to get involved in this political debate and many don’t want to lose the ability to attract workers with generous health benefits. “There is also a lingering distrust of the government, and they think they can offer coverage better than the government,” he said.”
Lolololol…No, large businesses know they can control workers better when workers fear of losing their jobs because of coverage. And, workers will then say “since you aren’t providing me this expensive health insurance, you should give me that money in my paycheck”. Can’t have workers in control.
It’s not just small companies that should be onboard with single payer.
In the very late 1970s the US automakers were concerned that the then about-to-arrive wave of Japanese car makers would eat their lunch. The Japanese could recruit young workers with low medical costs while the established US manufacturers were saddled with high costs due to their older workforce and numerous retirees.
IIRC, GM figured that the health costs for its staff + retirees were more than its wage bill. I remember being astonished they didn’t (as far as I knew) lobby the government to ‘socialise’ the costs so the Japanese would bear their fair share.
The U.S. healthcare system is so rife with corruption. What U.S. governments spend on healthcare (Medicare, Medicaid, VA, etc) is around 8% of GDP. That is what other industrialized countries spend for universal healthcare with better outcomes.
Feel free to consider any out of pocket costs for health insurance or care as a pure corruption tax. People die prematurely because of the current system. They go bankrupt unnecessarily. Worker productivity is less.
On net, this system is a loser doing serious harm to the national interest. These are socialized losses with a few pocketing gains.
Medicare for all seems to be one solution that is the most easily understood. We should also look to other private systems like France for private approaches to universal care at reasonable cost.
We keep saying “they” when we refer to the opposition. In reality, it’s one side that seems to want to keep the workforce “down on the farm” , so to speak. The insurance companies have been allowed to regulate themselves for a long time and for some of it, did well. Enter the new greed group and whoah boy, Houston, we have a problem. As rc mentioned above, worker productivity is lowered and people in the country are going bankrupt trying to pay medical bills ! Not O.K. Let’s point out the failures, work through a plan that includes ALL people in this country, and get on with it ! Health Care should be a given. What about the climate ?? It’s not going to fix itself, right ?
@rc — As we say: “We’re already paying for expanded, improved Medicare for All — we’re just not GETTING it!”
Once a country commits to absolutely universal healthcare, free at the point of care, exactly who pays what, when can be worked out. But that commitment is the essential first step.
And I agree with other commenters that taxes would not necessarily have to increase. Anyway, federal taxes do not pay for federal spending.
Not 8% of GDP, between 16% and 18%. The US spends 1.8 to 2x as much and gets worse outcomes.
Agreed, Yves. U.S. governments pay around 8% of GDP. Total spending is closing in on 18% of GDP. Most industrialized countries with universal care can provide everyone healthcare for 8% to 10% of GDP. So nearly 10% of GDP or $2 trillion is wasted on corruption.
BTW. $2 trillion/year pays for all the infrastructure, education and jobs programs plus balancing the budget. The cost is higher due to lost productivity, human pain and suffering. Even Jamie Dimon says that the costs from a lack of infrastructure investment are staggering.
It states, as apparently an unassailable fact, that taxes would rise. This is not at all necessary, nor obvious. Part of the ignorance or disinformation on the subject. Admin costs and insurance company profits would be eliminated or reduced. If other countries can do it for half the cost per person then it is not at all clear that costs and taxes would rise.
Any tax increase, if needed (questionable) would be less than what the decrease in personal and company payments. Kelton had an article on the financing of such a system many years ago. I do not have access to it now, traveling. Should be read by anyone who wants to understand this issue.
They need to sit down with their Canadian counterparts to understand what a “Medicare for All” system looks like and how it impacts (does not impact) businesses, especially small business.
1. This article mentions “Federal government must set prices” – wrong! In the Canadian system, that is generally done on the provincial level. The federal government provides general requirements and provides a percentage of the total expenditures, but much of the money is raised at the provincial level and they set their own policies for pricing etc. The provinces have focused on their individual situations of urban/rural/remote and population demographics to come up with their own healthcare structures.The biggest province (@40% of Canada’s population) is Ontario with 14 million people, much smaller than the large US states. The smallest is PEI with only 150k people, a fraction the size of Wyoming (the least populated US state).
2. Health care is almost a non-issue for small businesses in Canada. Basic care is provided for everybody in the business without the owner having to spend 30 seconds thinking about it or negotiating it. Supplemental insurance is available to provide better prescription drug coverage, private rooms in hospitals, dental and vision care, etc. That is the extent of what the business owners need to focus on with respects to health care coverage.
3. Somebody can start their own business without having to worry about being bankrupted to massive medical bills because they are automatically part of the system. There aren’t huge negotiating things like in-network or out-of-network charges that are decided while you are unconscious or on drugs. Prescription costs are typically the biggest financial issue if you don’t have supplemental coverage. Even then you don’t have to negotiate the prices – the provinces have set the prices the pharmacies can charge and the doctors have standard prescriptions they can prescribe for a condition knowing that reasonable prices have been negotiated.
I have been utterly baffled about how American business has been willing to tolerate this massive money and time black hole sucking out the core of their profits. The excess costs in the US health care system compared to the rest of the developed world would pay for the entire US military budget and much of that is coming right out of the corporate health insurance premiums and Medicare/Medicaid taxes. The US health care finances are a massive competitive disadvantage when competing with labor around the developed world. It is a key reason for stagnant wages and rising worker discontent.
Taxes should stay the same or rise slightly with a Medicare for All system because the US is already spending as much or more public money as any other developed country.https://www.visualcapitalist.com/u-s-spends-public-money-healthcare-sweden-canada/
What would dramatically shrink is the private health insurance premiums which are 5x as large as the OECD median private health care expenditures. That would free up thousands of dollars per employee. This is why the private health care sector fights the concept tooth and nail. It is existential for them as their entire gravy train would dry up. Matt Taibi used the analogy of a “vampire squid sucking on the face of humanity” for Goldman Sachs but he could just as easily apply that to the US private healthcare insurance etc. sector.
When Medicare for All comes to pass — and, oh, yes, it will — we will have a new national anthem. Goodbye, job lock. And say a big hello to Johnny Paycheck!
https://www.youtube.com/watch?v=EPrSVkTRb24
The biggest risk with MC4A is that it may only empower the already powerful private gov contractors working in the healthcare space. Claims processors, corporate healthcare employers, powerful provider organizations and the like can absolutely play politics and bend MC4A to their wishes. I support the effort but it makes me worry that we might not like what we get when the dust settles.
Correct. If you think the current system is bad, you won’t believe how mercenary the new one will be.
Current: uncontrollable costs, with insurance companies siphoning off 4-10% overhead/commission, but the employer companies footing the bills.
New: Medicare/Medicaid ADVANTAGE for all: your tax dollars (thousands per enrollees per year) going to United Healthcare, Centene, Superior health, Amerigroup, etc – private or for-profit companies who then decide how much of the billions collected should actually be spent on your behalf. The epitome of Crony Capitalism. I warned ya ;).
Thanks for this post. And finally. Finally. Master is a good spokesperson for MfA. And looky who’s on board: good thinking Republicans. It will take them, with all their basic uncorrupted sensibilities, to displace the stranglehold in Congress led by the neoliberal democrats and the reactionary right. My god – how nice.
I am a Brit. I was born in 1949 . My father worked in a factory his whole life. My mother didn’t go to work until I was eleven and then got a part-time job as a school cleaner. I went to state schools. I worked and became a Chartered Surveyor ( a bit like an Architect ) and prospered . I will be seventy in three weeks’ time. I have never been hospitalised , but my wife has . When our fourth child was born it was an emergency and he was born severely disabled and died after a week. I go to the doctor rarely , but when I do I get an appointment straightaway. The welfare state that I grew up with was a fact of life post 1945 . Conservative governments since 1979 have tried to diminish the apparatus of the state . My youngest daughter lives in the United States is married to a neuro-surgeon . Underwent IVF for their first child. Was cheated by insurance companies over deductibles . Why would the richest country in the world resist the opportunity to have Medicare for All. Answer : 310,000,000 wouldn’t . Only the 10,000,000 who have something to gain from such a wretched system would seek to maintain it.
I posted this before, but during the Obama health care debates I floated the idea of just having the federal government pay for health care to a number of small business owners of my acquaintance. Their reaction was universally negative. They were so convinced that government can’t do anything right that they were sure that it would just cost them more money in the end. This negative view of government generally is a real obstacle to what I agree is an essential reform.
I have the same conversation in my circles, but it doesn’t go far. The same people who despise government, have a curious hypocrisy, IMHO. They will state that not all jobs are worth $15 an hour, but in the next breath the cheer for those making thousands per minute. I’ve never seen a human being that is worth that much.
My feeling is several businesses might be reluctant to jump onto the Medicare for All bandwagon simply due to fact they are making tons of money off our current dysfunctional system. There is a whole ecosystem of software, IT services, BPO companies who have large healthcare divisions- setup solely to sell into the Health Care industry. I’m guessing in total it’s close to $20- 30 billion dollars in revenue.