American University
Health Law & Policy Brief

Spring 2014

A Business Case for Universal Healthcare:
Improving Economic Growth and Reducing Unemployment by Providing Access for All 

By David Sterret, Ashley Bender, David Palmer

[Excerpts below, the full text can be accessed at the link above]

From the Introduction

This report will illustrate that the United States economy is currently hampered in numerous ways by having an inefficient, inequitable healthcare system. The research on which we relied was completed before the full implementation of the Patient Protection and Affordable Care Act (ACA). However, we expect that even if the law works as intended, it will not resolve the problems that we raise because the law largely preserves our employment-based healthcare system. In Part I, we discuss specific harms to the economy inflicted by our system’s reliance on employers to provide healthcare benefits. Part II examines how the United States economy compares through the lens of several indices, including some published by conservatives. These comparisons illustrate that most countries with more vibrant economies than the United States have government- directed, universal healthcare systems.

II. Implementing a Universal Care System Would Improve American Competitiveness Internationally

A. The United States Trails Many of Its Competitors by Various Economic Measures

B. How the Employer-Funded United States Healthcare System Harms Businesses

C. Why a Universal Care System Would Lessen Burdens on Businesses

No universal care systems, including pure single-payer systems, are a free lunch for businesses. In one way or another, often through a payroll tax, businesses end up providing at least some of the money to finance the system.

There are several reasons to believe that a universal care system would mitigate this impact on businesses. Primarily, such a system would cause future costs to be lower, or at least stem the trend of cost-increases far exceeding inflation. Secondly, businesses’ overall share of healthcare bills would likely be lower. Finally, a universal care system would distribute costs far more equitably among businesses.

Conclusion

If the United States were to implement a system to ensure universal care, American companies would no longer face a disadvantage in competing with businesses from countries, such as Canada, that provide national healthcare systems. Additionally, healthcare would cease to be a large factor guiding individuals’ career decisions. A national, universal care system would level the playing field among domestic businesses, and eradicate the free-rider problem. For all of the above reasons, economic growth would likely improve, which would yield additional self-perpetuating benefits.

There is an argument that the taxes to finance such a system would constrain business. This claim is seriously undercut by examples from around the world. For instance, Hong Kong, viewed by many as a “beacon of capitalism,” has universal healthcare. So does Denmark, which has higher levels of entrepreneurship than the United States. What is becoming increasingly clear now is that the current employer-sponsored healthcare system in the United States does hurt business.


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