A single payer health system would eliminate 50% of workers compensation costs for all businesses

[burythehatchet]

Lost amidst the discussion of how much a national health plan would benefit businesses in terms of reduced health insurance expenditure is the fact that 50%+ of workers compensation premium is the cost of providing medical care arising from occupational injuries.

In addition, a lot of workers compensation fraud, estimated at $5 billion annually (I have no citation), manifests because the employee has no health insurance.


Medical costs continue to increase at or near double-digit rates. These increases have pushed medical costs to nearly 60 percent of the total losses for NCCI states in 2006.

http://www.insurancejournal.com/magazines/southcentral/2007/06/18/features/81729.htm

[MNDemNY]

1. Yes, but the poor insurance companies would suffer so!

Get your priorities straight. Think about the insurance companies!

[Cleita]

4. Worker's comp would still be necessary for wage compensation when a

worker is injured on the job, however, it should be a lot less expensive if the medical part of it was eliminated.

[MNDemNY]

6. Sorry forgot this:

:sarcasm:

[Cleita]

9. I knew you were being sarcastic, but I thought it would be a good

place to post that little factoid since you jogged my mind on it.

:-)

[MNDemNY]

13. ..

:toast:

[burythehatchet]

8. Right. The wage replacement (indemnity) portion of 50% would continue.

[Cleita]

2. K&R

The Worker's Comp savings could be a selling point to businesses for NHC even if they aren't sold on the group health insurance angle especially in the construction and other high risk industries that pay astronomical Worker's Comp rates.

[donco6]

3. I spend $500K a year on WC insurance.

630 staff members, total premium is around $500K. We've never had a claim due to loss of limb or appendage - all health care costs. Slips/falls, back problems, lifting, carpal tunnel. With national health care, I would think all this would be covered? We could put it back into instruction.

[Cleita]

7. It seems it could be cut in half if the medical part of it is no longer necessary.

I would like to hear what an insurance actuary and underwriter would have to say about this.

[burythehatchet]

10. that's exactly right. There would need to remain some form of incentive to

comply with safety standards, but there is certainly a better way than healthcare expenses.

[Lars39]

5. An added bonus...safety standards might actually make a comeback.

[lligrd]

11. And Small Businesses

How many people are too frightened of losing health insurance to make an attempt at starting their own business?

[Lars39]

14. My husband gave up on his business because of health care costs.

It happened suddenly. We weren't eligible for any assistance whatsoever. Makes me wonder if that was the intended consequence of Bushco pushing for people to start their own businesses. :(

[surrealAmerican]

28. ... and environmental standards.

The government would have more of a financial incentive to keep our air, water, and food supplies clean if it was the "single payer" of medical bills.

[tsuki]

12. In FL, more than 50%, at least in the trades. nt

[drm604]

15. It could also help with Doctors' malpractice insurance costs.

One of the reasons people sue for malpractice is that they feel they need the money for future medical costs arising from whatever injury they suffered. If they have guaranteed medical coverage they won't have this concern.

[TahitiNut]

16. Folks miss the most basic advantage to business of a single-payer system.

Currently, health care is an EXPENSE (whether employee compensation or workman's compensation) wheether or NOT a business makes a profit. Indeed, it can prevent a business from making a profit and lead to the demise of the business.

Single-payer health care would presumedly be a TAX on profits and therefore not burden the start-ups and businesses in the more competitive sectors. It would be a PROGRESSIVE approach to bearing the costs of health care.

This, of course, is why the 'big-foot' multinationals don't like it -- it would increase competition. We really must remember that the biggest enemy of small business is big business -- Wal*Mart wiping out the mom'n'pop stores.

[demodonkey]

17. K & R -- DU needs a HEALTHCARE REFORM Forum, please! nt

[bobbolink]

18. How much would it cost to run a half or full-page ad in, say, the New York Times,

explaining some of this stuff to the populace?

What ideas could we come up with to start countering the propaganda that people swallow without thinking?

WE need to start being the media!

[Vinca]

19. That's an expense I hadn't considered before. Added to the usual

business expense of providing health insurance, it makes universal, single-payer healthcare a necessity if we expect our businesses to survive.

[SoCalDem]

20. Notice how we have NEVER seen a direct comparison

Canadian family with asthmatic child, Mom & Dad..middle class..having their family finances compared to American family?

There's a place mentioned in Sicko , where the border runs through town.. Surely there are comparisons to be made right there..

Media will NOT allow those comparisons to air, because "ordinary people" would easily see which family is happier and better off financially and is healthier..

[Dragonfli]

21. I have yet to hear a rational argument against single payer Universal HC

I have heard lots of nonsense about SOCIALISM! OH NOES!
Nothing rational.

Lets face it, the only thing standing in the way of a system that does not cater to the profits of the insurance companies is the size and pocket depth of the insurance lobby.

It is to the detriment of our economy, our well being, and the strength of our nation to allow this pay for policy to continue.

[Cleita]

22. Welcome to the choir here.

The big problem is fighting that lobby without all the money, lawyers and propaganda that the insurance companies have in their favor not to mention the politicians that are in their pocket, many of them ours.

[Dragonfli]

23. Agreed - I wish I knew how to combat all that with simple truth

But the truth is it's not that simple.
I'd wager that 70% of the politicians are in their pockets, if not more.
Then there is the propaganda! The best money can buy, no doubt about that.

[HamdenRice]

24. I seriously doubt it

I support a single payer socialized health care system, but I think the article is making a big and wrong assumption.

If a worker is injured on the job after the implementation of single payer, that single payer is still going to seek reimbursement from the WC system to recoup its costs.

Or another example: if Joe beats Slick with a baseball bat, Slick can sue Joe for medical costs. If Slick is insured, then Slick's insurance company will sue Joe for medical costs. If Slick lives in a single payer, national health care system, then the single payer national health care system will sue Joe for Slick's medical costs.

In other words, the fact that there is a different finance system does not eliminate the basic rules of legal liability for causing injury.

Those costs will, however, be greatly reduced in a more efficient system.

[burythehatchet]

25. You're commenting on two entirely separate issues, no fault WC and liability

based indemnification.

Of course, some party will be responsible for the expense but with the employer left out of the equation for the medical component the system will be far less complex and significantly less expensive.

Why would there be a necessity to recoup costs based on existing WC statutes? Single payer would be responsible for the expense regardless of the circumstances of the injury.

Just as with health insurance, 30% of WC cost to the employer consists of profit and administration. In addition, WC is an adversarial system. Getting medical care in an adversarial environment does not work in an efficient manner.

[HamdenRice]

26. I agree that the admin costs will decrease drastically

but in socialized medical systems a wrongdoer is still required to pay for wrong doing. Otherwise the national health finance agency "subsidizes" wrong doing.

As for "no fault," it does not eliminate liability; all it does is eliminate the legal concept or requirement of "fault," which is to say "negligence," in order for the person who caused the injury to have to pay.

[burythehatchet]

27. I'm afraid that there's a slight misconception there

Put aside the flagrant violators of workplace safety like mine owners. Workplace injuries are typically not the fault of employers. Yes, some employers are better safety managers than others, but situations where a truck driver with a bad back claims WC is an example of chronic medical conditions that have no reasonable place in the WC system. They are medical conditions that somehow get attached to one employer. It is a broken system and my original point is that by removing the medical component from the WC financing system the resulting efficiencies would cut the net cost, while employers would see an expense reduction because they would have to finance the wage replacement portion only.

[HamdenRice]

30. I depends on the injury and depends on what you mean by "fault"

We agree that some injuries are caused by employers bad practices and some seem to be part of the job (like a trucker's bad back). "Fault" legally means "negligence" or some higher level of culpability. "No fault" means that the employer or WC system is liable regardless of whether the employer was negligent, but the condition is still caused by the work.

If the condition has nothing whatsoever to do with the work it should not and usually is not, paid for by WC.

So, a trucker's bad back may be caused by driving, even if legally the owner was not "at fault" (which means not negligent, which in turn means the problem was not caused by his doing or not doing something a reasonable owner would do).

But from an economic perspective, the trucker's bad back is still a cost of doing business. That's the idea behind no fault -- to take the moral and legal "blame" out of allocating costs and just recognize these medical outcomes, whether injuries or chronic, are a cost of the activity.

Economic theory and public policy strongly argue that all such costs should be borne by the activities and products that produce them.
If chicken processing causes carpal tunnel, through no fault of the processor, nevertheless, chicken parts sold in supermarkets need to bear the cost of carpal tunnel of its workers. That's the outcome that is both fair and efficient.

As the universal insurer for all, a single payer is still going to "recover costs" from activities that put the cost on the insurer.

[HamdenRice]

31. Since the system hasn't been set up, we're both just speculating

<On edit: Sorry I got confused with MyDU and had already responded to your post so this is kinda in the wrong place.>

Since the system hasn't been set up, we're both just speculating but having been around the "law and economics" people who have been at the forefront of the health care reform debate, I don't think it's at all likely that a universal system of health insurance or coverage would not include insurer subrogation.

You are correct that administrative costs, profits, advertising etc leave the system, and I concede that will reduce costs. But that's waste we all agree will go away.

But it's a fundamental principle of tort law, insurance law and the evolving health public and private insurance system that businesses have to pay for the cost of accidents (or medical conditions) they produce -- both to disincentivize accidents, for fairness, and to help finance insurance coverage. As you put it, "some party will be responsible," and insurance and tort theory say, the business activity that produced the problem. Otherwise, the injury costs are unfairly externalized to society. The cost of carpal tunnel caused by chicken processing has to be included in the price of chicken in the supermarket.

As you point out, there will be a positive benefit of the employee getting health care outside of an adversarial system. He'll just go get his health care in a universal system.

But the universal insurer will then recover from either the employer or the WC fund.

The reason we can be pretty sure of this is that this is how it works with Medicare and Medicaid. If a M/M patient's injuries have been caused in an accident for which someone is liable, then M/M is subrogated (insurance speak for substitited) into the claims of the patient as though the patient were a plaintiff in a lawsuit, and M/M goes after the person responsible for the accident. This does not affect the M/M patient's care and does not mean that the patient is getting care through an adversarial system, even though later, the person responsible for the accident is going to get sued by M/M in an adversarial process.

I don't see why a universal health care system would be any different. There certainly isn't any policy contingent arguing for any other basic theory.

[surrealAmerican]

29. Good point.