Burdened by healthcare costs, US businesses seek a shift

The message comes from Wal-Mart, but it reflects a view that's increasingly common in corporate America: The US healthcare system needs to be fixed. Big business can help, but don't expect us to shoulder the whole burden.

That was a subtext when Wal-Mart chief executive Lee Scott took the stage last week alongside representatives of a major labor union to kick off a campaign called "Better Health Care Together." The aim of this unlikely partnership is to extend coverage to all Americans by 2012, and Mr. Scott emphasized that the responsibility must be shared by government and individuals as well as business.

His rallying cry doesn't represent any shared blueprint among employers, but it does symbolize an important shift over the past year.

Faced with surging healthcare costs and employees who want insurance coverage, businesses have become more likely to be advocates, rather than skeptics, of a major overhaul. At the same time, their motive is not just to see healthcare problems addressed. They also want to avoid shouldering more of the burden themselves.

"Clearly, we're going to start moving away from employer provided health insurance," says Richard Brown, director of the UCLA Center for Health Policy Research. "Employers are seriously looking for a way to get out of this."

The major role of employers in America's healthcare system is, in some ways, an unusual artifact of history. The practice of employers providing health insurance spread in the wake of World War II limits on wages, which prompted many employers to provide back door pay hikes by offering health insurance to employees.

Given that legacy, many experts say the nation will probably migrate toward hybrid solutions, which blend a major government role with responsibilities for individuals and employers.

"Whatever kind of reform we have will be a mixture of approaches," predicts Jack Hadley, a healthcare expert at the Urban Institute in Washington. In the process, he expects that employers will end up covering a smaller share of American workers.

"That's certainly what the trend has been, and I don't see anything that would reverse that trend," he says.

Last year, just 59 percent of US workers were covered by their employer's health insurance, down from 65 percent in 2001, according to research by the Kaiser Family Foundation. And health insurance premiums, on average, are 87 percent higher now than in 2000, compared with cumulative overall inflation of 18 percent during that span.

It's not that businesses don't want to offer strong benefit packages to their workers. Many, especially at small businesses, can't afford big health plans. Even large businesses are asking employees to pay more out of pocket.

"Wal-Mart is committed to high quality, affordable, and accessible healthcare," said Scott of Wal-Mart on Feb. 7. "But our current system hurts America's competitiveness and leaves too many people uninsured."

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