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In: Operations Management

Describe Labor and employment law negotiation in health care

Describe Labor and employment law negotiation in health care

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Expert Solution

Negotiating health care coverage in the workplace is a fundamental issue in health care reform in the United States. Largely because of historical factors, most Americans receive health benefits through their or their spouse's employer, benefits that are provided and bargained as part of a larger wage and salary package. Different conceptions of what payment for health care and health insurance means to U.S. business-

1- Which is held by many business managers, is that like all other costs, health care costs are simply part of doing business, and so reducing them increases profits.

2- Which is shared by most economists, maintains that health costs or health insurance premiums ultimately come out of what would otherwise be money wages for workers. Thus a decrease in health costs implying a reduction also in benefits must be offset by an increase in money wages.

Wage contracts for unionized employers are typically negotiated for two or three years, negotiators must forecast, albeit with some uncertainty, wage trends, health care demand, and health insurance premiums. Moreover, the health benefit portion of the contract may be a relatively small part of the wage bill.


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