Why doesn't big business support a national health service?

Cross-posted from the blog, Stephen's Blog.

It is often argued that a "single payer" health insurance system run by the federal government or a national health service would be in the interests of American big business apart from the health insurance companies. The growing burden of healthcare costs on the economy would be brought under control, and companies would no longer have to pay insurance premiums for their employees. Companies in Britain and Canada are quite happy with the national health service in those countries.

So why does big business not promote a real healthcare reform? This is the question asked by Doug Henwood in Issue 120 of his Left Business Observer (a publication that I highly recommend for its astute analysis of American economic and political developments; see here).

Apparently some people offer a "web of influence" explanation that focuses on interlocks (overlapping membership) between insurance companies and other companies and on the role of insurance companies as a source of finance for other companies. Henwood presents detailed evidence to show that these are not very significant phenomena.

Basing himself on testimony from researchers who have interviewed top executives on the issue, Henwood states that some (perhaps even many) executives support "single payer" in private but are reluctant to make their views public for two reasons.

First, they worry about the possible reaction of other firms with which they do business. Small companies especially are considered hostile to "single payer." They do not stand to gain in terms of costs because they do not provide health insurance to their employees, while they would have to bear part of the additional tax burden. So they would see such a reform as an attempt to shift costs from big business to small business.

Second, they are afraid of "encouraging would-be expropriators." One informant formulates this fear as follows: "If you can take away someone else's business -- the insurance companies' business -- then you can take away mine." In other words, the politics of capitalist class solidarity trumps the economics of cost reduction.

Henwood adds another consideration: "Employers like workers to feel insecure. Fear of losing health coverage makes workers less willing to strike or resist pay cuts or speedups."

At least in this case, it is misleading to view reform politics solely as an arena of conflict among diverse business interests. It is also an arena of class struggle.

Stefan