CEOs Want Health-Care Reform

Posted on May 28, 2009  Comments (5)

Decades ago Dr. Deming emphasized the deadly disease of excessive health care costs in the USA. Since then, year after year, the situation has become worse (reaching $2.2 trillion in spending in 2007 – 16.2% of GDP). During that time senior executives has put forth very little serious effort (in comparison to the huge cost) to fix this problem. Finally, in the last few years, more and more senior executives are actively moving to address the ever worsening crisis (including, Howard Schultz, CEO at Starbucks).

They seem to be realizing that hoping the problem will just fix itself is not a great strategy. Finally senior executives are realizing they need to have the government address the systemic failures. Those executives need to keep up their efforts because those seeking to retain the system that doesn’t work, because they personally benefit from it, have been doing a great job of preventing progress for decades. Until a critical mass of senior executives demand change from Washington the chance of improving the relative performance of the USA health system in comparison to other countries is very bleak (we have just been getting more expensive and less effective [relative to other countries] over time).

CEOs Secretly Want Health-Care Reform

Carl T. Camden, CEO of Kelly Services (KELYA). Managing insurance for his vast, geographically dispersed workforce of temporary workers is horrendously expensive, he complains: “My health-care costs total more than my profits.”

But in private, “CEOs overwhelmingly want out of this business,” says Benjamin Sasse, an Assistant Secretary of Health & Human Services under President George W. Bush who’s now an assistant professor at the University of Texas at Austin. “They just do not want to be seen as more willing to dump [benefits] than their competitors are.” Sasse says many CEOs he has talked with would even pay a new tax if it got them out of the insurance business.

Related: Many Experts Say Health-Care System Inefficient, WastefulArticles on Improving the Healthcare systemApplying Disruptive Thinking to the Healthcare CrisisOur Failed Health-care System

Ivan Seidenberg, the Chairman and CEO of Verizon, has stated that the very nature of problems within the U.S. health care system mean that the health care market doesn’t function as a market at all.

CEOs Push for Systematic Reform of Health Care

“Some would say that given the state of our economy, we cannot afford health care reform,” said Gary Kaplan, M.D., chair and CEO of the Virginia Mason Medical Center. “But I think now, increasingly, given the state of our economy, we cannot afford not to have health care reform. It is clear to all of us we have a crisis. We have a crisis in coverage, affordability and quality.”

This is so true. How an argument that says we must accept the most costly system that doesn’t produce the best result because we can’t afford to have a more effective less costly system makes no sense. How is such an argument even accepted? But it is all the time. It is the “conventional wisdom.” Which doesn’t say much for conventional wisdom.

And that doesn’t even address that our system leaves tens of millions without insurance and forces poor economic decisions by millions of people. People are tied to their current jobs due to health care. If they want to go back to school, or go into business for themselves they must come up with huge health care premiums (if they can quality), take the risk their insurance won’t be dropped… It is an obvious friction on economic mobility if health care coverage is tied to your place of employment.

Waiting for C.E.O.’s to Go ‘Nuclear’ (2005)

The consuming Senate slugfest over judges (vital as they are) proves how Washington remains determined to fiddle while our biggest problem burns: a broken health care system that threatens working families and national competitiveness.

You would have to be a fool of a CEO to see a huge expense to your company rising every year in the USA more than inflation while you see the cost more contained in all the other countries your company operates in and not want the expensive broken system fixed. Now you might say it is someone else problem to deal with in 1982. By 1992 you have to be unable or unwilling to think of anything but the next quarterly report not to make health care reform a priority.

By 2002 you would have to not only be unable to think of the long term but unable to even see in your rear-view mirror. By this point the devastation caused by your fellow CEOs failures to get involved in fixing the health care system in the 1980’s and 1990’s was obvious. By 2009 many CEOs have understood what Dr. Deming told them decades ago. Those that still don’t, I really don’t understand. What are those CEOs thinking? They see one of their largest expense continuing to become worse every year and they don’t feel a need to actually address the issue effectively (especially when they can see their non-USA operations benefiting from much more effective health care systems). I just don’t understand that strategy.

5 Responses to “CEOs Want Health-Care Reform”

  1. Will
    September 20th, 2009 @ 11:22 pm

    Hi John I know this post is old but I just have to tell you about 2 CEO’s in our communities that have said the same thing. Ironically one is in the business of healthcare delivery, the other the CEO of a very large retirement community which also provides medical care. Additionally one of them said the worst thing for him personally is having to pass along much of the premium increases to employees, many of whom make so little money they can only afford to insure themselves, not their families, for whom they have to pay a higher premium.

  2. Warren Buffett and Bill Gates on Business, Health Care and more at Curious Cat Investing and Economics Blog
    December 1st, 2009 @ 12:23 pm

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  3. Curious Cat Management Improvement Blog » Manufacturing in the USA, and Why Organizations Often Don’t
    May 9th, 2010 @ 12:28 pm

    […] of a potential investment) also hampers raising investment capital for USA manufacturing. The broken USA health care system also is a big problem driving up costs of doing business in the USA […]

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    […] The very frustrating aspect of the broken health care system in the USA is that it has been an enormous problem for decades. It isn’t that we have just discovered we have a fatally poor health care system in the last few years. The broken system has been obvious for decades and keeps getting worse. Thankfully in the last few years more and more of those with clout in the current economic system are standing up to demand improveme…. […]

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