The recent report calling for “Moving Beyond the Employer-Based Health-Insurance System”, is one of many proposed solutions to the healthcare crisis that suggests employers should get away from offering health insurance benefits. [“Quality, Affordable Health Care for All” Committee for Economic Development Oct 2007]. It proposes that employees purchase their own insurance and take it with them when they change employers, equivalent to a “wealth insurance” plan like a 401(k) retirement account.

The report offers many strong arguments for such a change in its 134 pages of discussion, but the essence of the justification is that consumers, not employers, should have the “power” to decide what coverage each wants and is willing to pay for, while government and employers provide the “defined-contribution” funding needed to enable consumers to purchase coverage. The federal government would act as overseer of the market, while free competition among insurers would ensure that choices offer competitive prices and benefits to all.

Not all employers want to get out of offering health insurance benefits, of course, and a large portion of them have begun or increased their investments in employee health over recent years. Like the title of another report, many believe that “Healthy People Are the Foundation for a Productive America” [American Hospital Association Trend Watch, Oct 2007]. A growing number are offering onsite medical clinics that combine traditional sickness care with health management initiatives, and many offer onsite fitness centers to promote health and wellness among workers, knowing how much that helps promote productivity and performance, as well as saving on health insurance costs.

But the report also cites a survey that indicated roughly 2/3 of employers who responded believe that health benefits contribute to better employee health by enabling employees to afford accessing care when needed. Over half of them agreed that insurance coverage, per se, helps reduce employee absenteeism. [P. Fronstein & R. Hellman “Small Employers and Health Benefits” Employee Benefit Research Institute Issue Brief # 226 2000].

Another study found that 40% of employers agreed that health benefits were extremely or very important for improving worker productivity. Paid sick leave can also boost productivity by enabling workers to take time off to see a physician or other source of care, and to avoid coming to work sick with a condition that can infect their peers. Empowering them to get care onsite saves them the time that would be lost seeking care elsewhere, plus helps keep workers healthier and more productive at work. K. Davis, et al. “Health and Productivity Among U.S. Workers” The Commonwealth Fund 2005]

In the UK, where government health insurance already covers everyone, employers have increasingly begun offering private health insurance to improve their success in recruiting and retaining essential “talent workers”, becoming increasingly difficult to find almost everywhere. They also invest in employee health management (EHM) in order to reduce turnover, improve productivity and even add to customer satisfaction, quality, error reduction, and new business acquisition. (Check out www.vielife.com for a variety of examples.)

While solutions that rely on individuals taking responsibility for their own health and care — with guaranteed coverage for all through combinations of required employer and taxpayer contributions – may be the answer to the current crisis, it will not relieve employers of the burden of health insurance, since most will have to pay a share of the overall costs. Moreover, it will continue to make sense for most employers, particularly those relying on “talent workers” as contrasted to easy-to-find-and-replace “cannon fodder”, to invest in maintaining and improving their workers’ health.

The most important shift in health benefits will not be the shift in burden from employers to consumers. It will be the shift from sickness care to what can truly justify the name “health care”, namely prevention, preservation, and improvement of health, rather than using over 95% of the dollar on sickness care. And employers will still offer both one of the most logical contexts for health care, but the most logical partner for consumers, since they will benefit as much as workers and their families from better managed health.