Study: High Health Care Costs Make U.S. Companies Less Competitive Abroad

A former high-ranking health policy advisor during President Bill Clinton’s early years in the White House says the current health care system puts the nation’s businesses at risk for losing jobs to other countries. Study co-author Len Nichols, of the New America Foundation Program, is encouraging a move away from an employer-based system into one that is consumer-driven and supplemented by the federal government.

According to the study, U.S. firms far outspent their foreign counterparts on health care costs. For example, for every American worker making $18 an hour in 2005, U.S. companies spent $2.38 per hour for that worker’s health insurance. Firms in countries such as Canada, Japan, Germany, the United Kingdom and France shelled out more money per hour ($20) but spent 96 cents per hour on health care for each worker.

The public policy organization and think tank supports a system wherein employers would be able to use money generally purposed for health care costs to, instead, give their employees raises. In that way, employees would be responsible for acquiring health insurance on their own.

Read more about the New America Foundation Program study here.