Once again I put on my body armor and grab my shield, as I begin another article about healthcare. Few things get entrepreneurs and small business people as riled up as a good rousing healthcare discussion.
I’m not here to arrogantly claim to know what ALL small business owners in the U.S. think about the healthcare issue – just the opposite. When I read articles where someone professes to speak for ALL small businesses, I have to laugh. Says who?
We in the small business community are not the Borg. We are individuals -- not some homogenous group. Our situations differ from person to person, company to company. Why wouldn’t we have different views on the healthcare issue?
Recently a survey caught my eye that perfectly demonstrates why small business sentiment on healthcare is so hard to pin down.
Vertical Response surveyed 831 small business owners in September-October 2009. The following survey finding is just one example of why you cannot generalize among small businesses. The survey found:
71.8% of businesses with 1-10 employees DO NOT offer healthcare
69.4% of businesses with 11-100 employees DO offer healthcare
That’s a stunning difference! In other words, you have two groups of small businesses – and the results are almost exactly opposite. The smallest small businesses tend not to offer coverage, while the majority of larger small businesses do provide health benefits.
Why is this? Economics, pure and simple. Smaller businesses tend to be younger (more startups), with uncertain revenue streams, and less working capital to operate with. In short, they don’t have the resources to offer healthcare to employees. Add to that a small employee insurance pool, and now you have a recipe for noncoverage under the current system: smaller businesses cannot negotiate insurance rates as favorable as businesses with larger pools.
Even staff resources become an issue. In a very small business you probably do not have full-time HR staff. Who in the company will have the time to evaluate coverage options and negotiate with insurers on complex and convoluted policies? Often that burden falls directly on the business owner’s shoulders – the same harried business owner who is wearing 10 other hats.
Net result: the business owner who provides healthcare today is going to be in a different mindset from the one who is unable to provide his or her employees with healthcare. The business owner who is unable to provide health benefits (and stressing out over it) may be more favorably inclined toward a public option -- versus one who currently offers healthcare coverage and may see that as a competitive advantage over competitors who don’t.
Lesson: if you try to lump together businesses from both size groups, you’re mixing apples and oranges.
This is just one example I pulled out of a survey. There are many other differences in circumstances among small businesses. The Vertical Response survey was based on a relatively small sample size – but the results are actually consistent with other surveys and studies I’ve read on the issue. Size – and other factors – do indeed matter when it comes to healthcare. And that’s what makes it so hard to generalize about small businesses on the issue of healthcare.
Anita Campbell is the Editor of Small Business Trends, an online community for small businesses.
