A LIE WE'VE BEEN FED FOR DECADES ...

SMALL BUSINESSES Are NOT The Job Creators You've Been Led To Believe!

Anti-Health Plan Boobs' Bubble Bursts!

NOW what straws will the "socialist medicine" nuts grasp at?

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"Small Business, Big Fable"

By Steven Pearlstein
Wednesday, July 8, 2009

ONE OF THE MOST ENDURING LIES in American politics is the myth of
small-business job creation.

You probably know it by heart: Small businesses create 60, 70, even 80
percent of all the new jobs in the United States.

Back in the 1980s, I was a senior editor at Inc. magazine, where I
worked on some of the articles in which some of the seeds of this myth
were planted. Up to that point, there was a widespread tendency to
conflate the success of the economy with the fortunes of big business,
so it was rather useful to have some data highlighting the importance
of small firms.

By now, however, that analysis of net job creation has been repeated
and embellished and oversimplified by so many lobbyists and
politicians that it is only a matter of time before the magic number
swells to 100 percent of job creation and small businesses will be
demanding to be exempted from all taxes, all regulation and the Ten
Commandments.

This is not the time or place for a long statistical explanation.
Suffice it to say that, in terms of new job creation, the data show
that most of it happens in a small number of very fast-growing
companies that are no longer what most of us would consider small.
There are lots of reasons for the success of these fast-growing firms,
among them the ingenuity and hard work of their founders, the
availability of capital and a culture that celebrates risk-taking.

But the dirty little secret is that a lot of small-business job growth
has also been driven by the decision of big businesses to outsource
many tasks that they used to do in-house. In an economic sense, jobs
haven't been so much "destroyed" and "created" as they have been
shifted from one company to another.

All of which brings us to the issue du jour: health-care reform.

From the beginning, President Obama and congressional leaders have
said they want to pursue a reform agenda that builds on the existing
employer-based health insurance system. One glaring problem with that
employer-based system, however, is that every year more employers --
mostly small and mid-size businesses -- offer no health insurance. The
result is that about 35 million American workers and their family
members have no health insurance at all.

To fix that problem, most health reform proposals envision a new
government-sponsored insurance "exchange" in each region through which
all insurers would offer a basic health policy at the same price to
all employers, regardless of size, and all workers, regardless of
preexisting health conditions. For the exchanges to succeed in
lowering the cost of insurance, all employers must be required to
offer coverage and all employees must be required to purchase it.

The small-business lobby, however, remains just as stubbornly opposed
to an "employer mandate" as it was 15 years ago when President Bill
Clinton proposed it. Requiring small firms to offer health insurance,
they warn, will drive millions of them out of business while sapping
from all the others the profits they need to invest and grow. And
since small business, as we all know, accounts for virtually all job
creation, an employer mandate will stop the U.S. economy dead in its
tracks.

This argument, of course, is 100 percent Grade A hooey, beginning with
the myth of small-business job creation.

After all, one reason small businesses "created" all those jobs in the
first place is that they enabled big companies with generous health
plans to outsource work to small companies that had lower cost
structures because they offered no insurance at all. If simply
requiring those small businesses to offer health insurance would wipe
out that cost advantage and drive them out of business, then maybe
those companies weren't the great engines of innovation and efficiency
that they always claimed they were.

Most likely, those small businesses today are no longer competing with
big companies, but with other small firms with similar cost
structures. Requiring all of them to offer health insurance wouldn't
put any firm at a competitive disadvantage -- it would simply raise
costs for all of them, forcing them to pass those costs on to someone
else.

In the short run, that someone else would be customers. Business
owners are always quick to claim that they can't raise prices because
of competitive pressures, but if that were true, prices would never
rise.

If a price increase is steep enough, some customers will probably
decide to buy less of whatever the small businesses are selling, which
could result in some job loss. But in the case of the cost of health
insurance, a typical small company would be passing on a total cost
increase of a couple of percentage points -- hardly the stuff of
economic calamity.

Economists agree that in the long run, however, the increased cost for
employee health benefits would be passed on to the employees
themselves in the form of lower wages and salaries. That's what
happened economy-wide in recent decades, as average wages stagnated
while the cost of health insurance skyrocketed. If the same holds true
for small businesses, then requiring them to provide health insurance
should result in no job loss at all.

In the coming weeks, we'll find out if political mythology will
continue to trump sound economic logic. After all, small businesses
would be the big winners from those new health insurance exchanges,
and Democrats in both the House and Senate have agreed to sweeten the
proposal even further by offering tax breaks and exempting the
smallest firms from any health insurance mandate. Still, most of the
small-business lobby remains reluctant to sign on.

It gets you to thinking: Maybe there's a reason why these are small
businesses.

[Steven Pearlstein will host a Web discussion today at 11 a.m. at
washingtonpost.com. He can be reached at pearlste...@washpost.com.]

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/07/AR2009070702650.html

http://www.usatoday.com/money/industries/health/2004-02-24-hospital-bills_x.htm
Hospitals sock uninsured with much bigger bills
By Julie Appleby, USA TODAY
Ed and Dianna Jellison let their business' health insurance lapse
while they shopped for a better price. But then Ed fell ill, spending
17 days in a Florida hospital as a viral infection ravaged his body.

Now the couple are fighting a $116,000 hospital bill, one they say
could be as low as $25,000 if an insurance company were paying it.

The tough truth for patients like the Jellisons — who earn too much to
qualify for charity care — is that they are often charged the highest
prices for hospital services.

Few know that. And they're stunned when they learn.

"If they accept $25,000 from an insurance company on a routine basis,
and what they're charging us for the same thing is $116,000, that's
not fair, and it's not right," says Dianne, who closed the couple's
roofing business and took a part-time job in a warehouse because Ed's
illness left him disabled.

http://www.usatoday.com/money/industries/health/2004-04-13-rising-hospital-costs
_x.htm

"Rapidly rising hospital charges have placed hospitals in the
spotlight. Critics say hospitals are unfairly using their growing
clout in many markets and charging far more than it costs to provide
services. Spending on hospital care is the fastest-growing segment of
the nation's health care tab."

"Because most hospitals rely on government health payments for about
50% of their revenue, and private insurers who negotiate discounts for
much of the rest, raising charges is one way hospitals can try to
bring in additional money from individuals and insurers not covered by
the discounts"

http://moneycentral.msn.com/content/Insurance/Insureyourhealth/P74840.asp
Profit-hungry hospitals are overcharging consumers an estimated $10
billion a year. Some deliberately work to keep bills indecipherable.
Here's how to fight back.

By Bankrate.com

American hospitals are fleecing patients out of billions of dollars
annually, and experts say that while some of the overcharges are
honest errors, many are deliberate.