Private healthcare makes industries less innovative. It's time for change.
1 in 4 American workers stay in their jobs because of the healthcare. It suppresses wages and working conditions - and prevents innovators from heading out on their own.
This is a striking, but not necessarily surprising, figure from a new survey by the West Health-Gallup Center on Healthcare in America:
“A new report finds that nearly a quarter of workers who get health insurance through their jobs report staying in unwanted jobs for health insurance — a figure that's risen dramatically in the last five years.”
The figure rises to 41% of people with three or more chronic health conditions. The figure has risen wildly in part because Affordable Care Act subsidies were allowed to expire.
I’ll get the soapbox out of the way first: having spent around thirty years of my life in the UK before moving to the US, the thing I miss most is the NHS. It’s been treated like a political football since I left and is apparently a shell of its former self — not because the idea is bad and can’t work but because conservative politicians, some of whom have received funding from private healthcare companies, have deliberately sabotaged it. But it’s hard to explain the lack of fear of walking into a doctor’s office or a hospital. You know for a fact that there won’t be an onerous bill. You can just get seen. That security allowed me to found my first startup, which in turn has set the stage for my entire career.
If you’re in the US, you may have heard some less pleasant things about socialized healthcare: it turns out much of it was a deliberate disinformation campaign by private health insurers, which I think says a lot about how the whole American healthcare system actually works.
That soapbox out of the way, I also want to highlight how the private healthcare system creates perverse incentives for employers and dampens innovation.
If employees have freedom of movement between companies, the incentive for employers is to create the best working conditions possible: higher wages, great benefits, a nurturing working environment. If, on the other hand, some employees are effectively chained to their desks by their need to have healthcare, employers have less of a need to provide those things. As long as they provide a reasonable health plan, wages and working conditions are secondary. As the West Health-Gallup Center themselves assert, the effect is lower wages and worse work.
In turn, fewer innovators are empowered, which is a disaster for industries like news that desperately need innovation. Often, innovators will find themselves constrained by their existing employers for various reasons and want to leave to explore a new idea that has the potential to change their industry. (That was my experience leaving the university sector to build a social platform for learning, which was ultimately used by Ivy Leagues, non-profits, and governments around the world.) If they can’t because they’re tethered to employers who won’t greenlight their ideas, those innovations will never see the light of day.
So not only does socialized healthcare allow people to be healthier by removing the fear of going to the doctor in the first place, it improves wages, creates more competitive working conditions, and promotes innovation.
Even a representative for the Cato Institute — a libertarian think tank — has this to say in the piece:
“Favoring employer-sponsored health insurance creates coverage gaps, reduces income mobility, and is crying out for reform.”
When even the libertarians want reform, you know it’s a bad deal. We need a different healthcare system. While the libertarians would likely disagree, my vote — having experienced and enjoyed it for much of my life — is for universal healthcare. The only real downside to it is that a bunch of companies that have entrenched their positions taking advantage of ordinary people will be denied a little profit. Which, you know. Pardon me while I find my tiny violin.
