By Zane Safrit
Do you stay at your job for the health care benefits? You’re not alone. Lots of American workers are held hostage by their company-sponsored health care benefits.
This employee hostage scenario is more and more common: Your company’s changes have marginalized your contribution, maybe your income, definitely your happiness.
You’d like to leave. You’d like to join that small startup company across town. It’s innovative and smartly run. Everyone who works there raves about the mission, the opportunity to contribute. They arrive early, leave late…and it’s because they’re inspired to make a difference.
That’s how your current company was when you and your friends started working there 3-4-5 years ago. But, since then it’s grown, it’s changed. The company devotes more resources to an employee manual than to serve your customers. Your day is spent in meetings, upstreaming reports to the next level. The bureaucrats have arrived. And out the door went the life, the passion, the innovation that drove your company’s growth.
And you and your colleagues now arrive on time and leave on time.
Oh, the company’s still thriving. It’s profitable. It’s in the cash-cow phase and the owners are milking it before it’s sold just before it goes to market or your industry reaches the commodity-hell.
But you stay because you need the health insurance coverage for yourself or your family.
All your talent, all your skills, all your knowledge, you as a talent resource, goes underutilized. Wasted. Marginalized. And lost in this process is the productivity that results from the proper use of a company’s most important asset: you.
That lost productivity is measured in lost opportunity costs. Translation: it’s the costs of the opportunities a company can’t exploit because they don’t have you, the talented and skilled and motivated you, and millions like you. Those costs are measured on a national level by rising unemployment numbers, lower GDP numbers, lost innovation that keeps our country competitive in the global economy. It’s measured in the rising brain drain as more talented people choose other destinations, countries, where they can not only contribute to innovative solutions, they won’t be held hostage by arcane business models for providing health care for them as employees or just as a human being.
Let’s drill down one layer.
For small companies this means a near-impossible hurdle to clear. That hurdle is offering health care benefits as an employee benefit. This benefit is critical in recruiting and retaining the most skilled and knowledgeable worker. The one that not only brings enthusiasm at the prospect of once again working for an exciting, motivated, open, innovative company, but one whose skills enable a significant contribution.
Job-lock or hostage-by-health care is a crippling disease for the small business community. And that makes it a crippling disease for our economy. Jobs drive our economy. Small business drives job creation. (Doubt it? When’s the last time you heard a major US corporation was [adding] thousands of jobs? )
But small business can’t drive their vision without the talented human assets. And one of the biggest hurdles to this is their difficulty in creating a company sponsored health care benefit for their employees.
Why’s that? It stems in large part from the business model health insurance companies have created for group health insurance plans. This model treats each group as a standalone profit center. So, individual premiums are priced based on the group revenues they’ll deliver to the provider compared to the expected costs from the members’/employees’ claims. And a small company’s group plan, with its limited number of members and their limited amount of premium revenues creates a limited potential profit easily wiped out with but a single claim from one employee.
It makes sense, financially. You have revenues; you have costs; you have business risks. Big companies love it. It’s easy to administer and it’s a powerful recruiting tool when you can’t offer an exciting, innovative, meaningful workplace. You offer security, peace of mind. There’s no way to compete against that while not putting your family at risk.
The unexpected outcome of this is the insurance industry has walked away from the premium revenues from hundreds of thousands of small businesses with their combined millions of employees. Individual plans are too expensive for many small business employees. And group plans are too expensive for the company to offer.
(As a CEO of a small company I know that premiums were more expensive under a group plan than individual plans. And still they were too expensive for some. So we raised their salaries above average for a company our size, our industry and our community.)
And as a result,
Rising costs of health care are passed on through rising premiums to a smaller number of existing customers,
Small businesses and their contribution of jobs and innovation and community development continue to struggle to find the talent to drive their growth,
Large mature corporations, no longer driving job growth through innovation or change and choosing instead to maximize profits for shareholders, are able to, in effect, hold their talent hostage for their need of affordable health care. And thereby they stifle the development of their most difficult competitive challenge: innovative products from small companies.
Consumer choices grow increasingly limited.
Solutions for our national challenges are increasingly limited to those that only benefit the corporations who’ve benefited from the creation of the problems they seek to solve.
It’s a mess. It’s likely going to get worse. There’s too much infrastructure invested in our current system. But it’s not going to get better until more complaints and outrage and solutions and demands for solutions are generated.
I’ve blogged about a few solutions here: Health Care Victories This Week.
Together, we’ll create yet again the best health care system in the world. And besides, looking around the room, I don’t see anyone else but us here to do it.
About the Author: Zane Safrit’s passion is small business and the operations’ excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He blogs about health care issues each Monday at http://zanesafrit.typepad.com. There on the sidebar is a list of blogs and resources to educate yourself on the health care challenges you face, I face, we all face together. He also writes on small business, word of mouth, marketing, branding, innovation, and failure.
He previously served as CEO of Conference Calls Unlimited.
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.