News Release

Local Small Business: “If I Ran My Business the Way Health Care Does, I’d Have to Shut My Doors”

For Immediate Release

Philadelphia, PA Oct. 7, 2009— Pennsylvania small business owners are being crushed by rising health care costs according to a new report released by the Pennsylvania Public Interest Research Group today.

“Inefficiencies and waste in health care are driving up the costs of coverage for small businesses throughout the state,” said PennPIRG’s Field Organizer, Catherine Ngo. “Our report gathers stories from small business owners across the state, and the problems are always the same: unaffordable policies, insurance company abuses, and an inefficient system drowning in red tape.”

The new report, Small Businesses at Risk, makes clear that small business owners, like Kathleen Henry of Philadelphia’s RH Properties, need health care reform.

“Health care right now is such a problem that if I tried to run my business the way they run theirs, I’d lose all of my customers,” Henry said.

In an event releasing the report, Kathleen Henry used her own business to demonstrate leading health care problems:

•    In the health care system, doctors get paid according to how much treatment they provide, not quality or outcomes.  Meanwhile, insurers drive up costs with red tape and inefficiency.  If Kat Henry & RH Properties did that, her tenants would be paying for every room in the apartment they rent, and extra for each window, closet, door, and coat of paint, regardless of whether they make it any better.
•    In the health care system, premiums have doubled over the last ten years, and they're set to double again over the next eight.  If Kat Henry & RH Properties’ prices had been going up like health care costs over the last decade, a basic $700/ month 1-bedroom apartment would cost $1,400/ month today.  And customers would be shelling out $2,800 by 2017.
•    In the health care system, if one of a business’s employees get sick, the insurer increases the premiums every other employee needs to pay, too.  In a small business, that means that one employee getting sick can make coverage unaffordable for everybody! If Kat Henry ran her business that way, every time one tenant’s pipes burst or their electricity went out, she would raise everyone’s rent, even if they don’t live in the same building.

“In any other business, consumers wouldn’t tolerate these sky-high prices, rampant inefficiencies, and customer abuses without walking out,” concluded Ngo.  “But lack of competition and skewed incentives have turned our health care system into a nightmare.”

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PennPIRG, the Pennsylvania Public Interest Research Group, is a non-profit, non-partisan public interest advocacy organization.

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