Health-care reform: what it means to practice owners, associates

Health-care reform: what it means to practice owners, associates

Will you better or worse off after health-care reform?
Oct 01, 2009

Dr. Gary Block
NATIONAL REPORT — $455,000 per year. That's the cost of health care for the 130 workers at Dr. Gary Block's emergency and referral clinic in Rhode Island.

Health-care reform legislation under consideration by Congress could raise Block's annual health insurance costs to more than $650,000, or lower them to $400,000.

Several new health-care reform bills are circulating and require individuals to carry insurance and businesses to offer it. There are provisions in some of the proposals, however, to ease burdens on small businesses, offering tax breaks and levels of exemption based on payroll sizes. Which proposal is chosen in the end may depend heavily on the contested public health insurance option in the House bill, favored by President Barack Obama. Other versions, like those introduced in the Senate, do not offer a public health-insurance program.

With a strong emergency and referral practice, Block says he doesn't worry too much about the cost of offering health benefits for his 130 hospital workers. Like most practices, he has faced double-digit premium increases over the last three years and now spends more than 3 percent of his revenue on providing health care, but Block says he will do what it takes to care for his workers and keep attracting the best.

"It's a huge expense, and it's going up every year. But offering some type of health-insurance benefit is important when you're trying to recruit employees. It's probably double for trying to recruit support staff," says Block, DVM, MS, Dipl. ACVIM, and co-owner of Ocean State Veterinary Specialists, a 27-doctor referral and emergency clinic in East Greenwich, R.I.

Block's bottom line isn't affected much by his benefits costs because of the size of his business, but he says smaller practices affected more deeply by the recession are in a different predicament. It's a reality of small business ownership that is not uncommon among veterinary-practice owners — a part of the smal- businesses segment that grapples with how to attract the best employees by offering them competitive benefits while still being able to meet payroll.

Small businesses, or those with fewer than 20 employees, made up about 18 percent of private sector jobs in 2006, and about a quarter of all job growth over the last decade. Yet these businesses, like veterinary practices seeking to offer benefits, pay up to 18 percent more per worker than larger firms for the same health insurance policies, according to a report released July 26 by the Executive Office of the President's Council of Economic Advisers. The answer to some may be to not offer health insurance, but then their ability to attract the best employees is compromised.

Health-care reform, always a hot topic during presidential campaigns but hardly successful in the Legislature, may have more traction this year. Democrats and Republicans are battling out the nuts and bolts during primetime addresses, and the public is engaged in the debate. But what do their proposals mean for small-business owners, particularly the bottom line in the average veterinary practice?

Whats on the table
Three different proposals (see "What's on the table") are circulating, with one, House Resolution 3200, garnering the most attention from lawmakers. HR 3200 and the Senate HELP bill both require businesses to offer insurance coverage, with varying requirements for how much of the premium businesses would have to cover. All the proposals call for the creation of an exchange program; a marketplace for individuals and, initially, very small businesses to shop for insurance rates previously accessible only to larger companies. In the first year of the program, companies with fewer than 10 employees could participate in the exchange. Companies with fewer than 20 employees would be admitted in the second year and larger companies being phased in during the third year and beyond.