The CEO’s Guide to Restoring the American Dream

The system of employer-provided health insurance resides at the heart of US health care problems today.

World War II brought tight wage restrictions to employers. To compete for workers, they increased benefits and many began offering health insurance. This uniquely US model blinds workers to the real costs of health care and creates a perverse incentive that discourages preventative and chronic care while rewarding far more expensive acute and reactive care.

Almost one-third of Medicare spending occurs in a patient’s last six months of life and covers mostly unnecessary and/or harmful treatments that line the pockets of the health care industry. Another third of the $3 trillion spent on US health care amounts to fraud and waste – enough to make college free for every high school graduate or to insure every uninsured American six times over.

Though health coverage for employees constitutes enormous expense, most firms don’t scrutinize their spending.

Health care is often a company’s second-largest expense after payroll. As much as 10% goes to fraud and up to 30% to other waste. Few CEOs would tolerate that in any other line...