When In Doubt, Blame Healthcare

By | November 26, 2012

I spent the early years of my career working with a large number of retailers, often distressed retailers.  Every quarter, as they presented their results, they were always looking for something (anything?) to explain declines other than the fact that their business was broken.  There was one fewer Saturday. Seven more rainy days.  The calendar – and the weather – became a company’s best friends in the proverbial “blame game.”

Today, the game hasn’t changed much – but these friends have. Now, it seems the new trend is to blame healthcare for all that ails your business.  Papa John’s cites healthcare for an increase in prices and a reduction in workforce.  Opponents of Obamacare blame it for the national unemployment rate.  Hostess and its major union’s dangerous game of corporate “chicken” began over a proposal to increase employees’ out-of-pocket costs for healthcare.  The Verizon strike began the same way.

Don’t get me wrong – healthcare is a massive expense for employers.  It has legitimate implications for financial results, and even product pricing.  But proactively addressing costs – rather than blaming them – is something responsible leaders and employers must do if they want their businesses to remain viable. Especially when the victims are as beloved as the Twinkie, Americans – and stockholders – will stop accepting the healthcare excuse and start demanding better leadership from their companies.

Part of the problem is the changing shift in attitudes of Americans about the role of healthcare in general.  My parents’ generation viewed healthcare as protection from catastrophic illness.  They were covered under traditional indemnity plans, and expected to pay a deductible and 20 percent of the costs on top of that.  Then came managed care, and the notion of covering preventative and wellness care in order to reduce the incidents of catastrophic or chronic illness.  The unfortunate side effect: Americans now expect a CAT scan to cost them less than a haircut. That’s just not realistic – and companies, both the health care providers and the employers themselves – can do a better job of setting expectations.

An interesting side effect: as the “blame healthcare” movement heats up, time will tell if it impacts insurers in a more dramatic way.  Sure, there are always discussions about insurers being too profitable at a time when so many struggle to afford insurance at all.  But as publicly traded companies, they have a primary responsibility to their investors to make a profit (which is why some in related businesses, like Nationwide Auto Insurance, even tout their privately held status as better for policy holders).  So as the blame game intensifies, the insurers, many of whom boast market caps measured in billions, may be the next target.

Occupy healthcare, anyone?

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