Health costs are small businesses’ No. 1 problem

The cost of health insurance is the No. 1 problem cited by small business owners. Health costs beat gas prices — the No. 2 most severe problem cited by small business, in a March 2008 survey.Smallbusiness

This week, small business leaders convened at the annual National Small Business Summit conference of the National Federation of Independent Business (NFIB).

The report notes the downturn in the economy during the second half of 2007 when the NFIB Small Business Optimism Index dropped to 94.6 in December, the lowest since 2001.

Health care costs rank first in small business problems regardless of
the legal form of business (including proprietorships, partnerships,
C-Corps, S-Corps, or LLCs).

This NFIB’s survey of small business reveals the major concerns of small business owners. Small Business Problems & Priorities was
released this week,following up similar surveys from 1982, 1986, 1991,
1996, 2000 and 2004. Having these historical data for comparison is
useful and instructive.

Click on the chart on the right to see how the top 8 problems of
small business rank since 1982. The takeaway is easy to see: health
care costs have been the top small business problem since 1982, when
this survey was first conducted.

Jane’s Hot Points: Small business has felt over a
quarter-century of hurt when it comes to health care costs, and this is
shown to be true for the smallest-small companies (with 1-4 employees)
to larger (with over 100 employees). Health costs are also the top
problem for small business across industries, from agriculture and
retail to wholesale and construction. The NFIB survey doesn’t call for
specific remedies. But it does call out for change, and soon. A silver
anniversary on health cost-problems is nothing to celebrate.

3 replies »

  1. I think this survey is just a little dated. I have a feeling that if you took the same poll today you’d find energy prices rating much higher as a concern …

  2. Seeing how small business hates government interference I’m guessing they don’t want any government solution to healthcare costs. So as they like to say for every other problem, “it supply and demand” I guess when enough small businesses demand lower health costs then there will be a supply out there for them. Oh, and continue to vote Republican, that’ll help.

  3. Many companies should be able to reduce their health care costs by having healthier workers. One way to have healthier workers is to promote healthy activities and do so at a reasonable return on investment. It costs a company nothing to encourage it’s workers to take part in preventive health screenings that can be purchased by the worker. They can then hold a small contest, i.e. the person with the largest percentage drop in cholesterol over 3 months get treated to a lunch of their choice.