Buffett Is Right: Healthcare Costs Are the Real Rising Tax on Your Business

What’s the biggest tax on American companies?

If you immediately thought corporate income taxes —  which policymakers in Washington are working to lower in order to boost American competitiveness —  you’re not alone. But, according to Warren Buffett, you’re wrong.

Last week at Berkshire Hathaway’s annual meeting, Buffett warned that “medical costs are the tapeworm of American economic competitiveness.”

Unsurprisingly, he hit the nail on the head. Healthcare cost growth is a huge business problem, one that is a drag on business growth and competitiveness for enterprises across all sectors.

Healthcare cost growth is a huge business problem, one that is a drag on business growth and competitiveness for enterprises across all sectors.

Consider that healthcare now accounts for 17 percent of our GDP. With half of all Americans receiving health insurance through an employer, businesses are picking up quite the tab when it comes to healthcare. According to Kaiser Family Foundation, the average annual premiums for employer-sponsored health insurance are $6,435 for single coverage and $18,142 for family coverage. To put that in perspective, family coverage costs more than the minimum wage on an hourly basis!

Fortunately, technology and healthcare are coming together like never before, and a new wave of digital health apps, tools, and services that help employees take control of their health have entered the market. These tools can help employees manage chronic conditions, guide them to the right provider, and achieve their wellness goals. Collectively, these tools have tremendous potential to change the healthcare value equation for employer and employee.  

Collectively, these tools have tremendous potential to change the healthcare value equation for employer and employee.  

The problem is businesses lack a way to track, analyze, and effectively deploy these tools. The platforms developed to manage other business operations — like Salesforce for sales or Oracle for finance — are not yet common for health benefits. That’s why we created Castlight’s health benefits platform. Castlight brings together all of an employer’s health plans, benefits, and wellness offerings into one platform so that HR leaders can manage their health benefits and costs as effectively as all of their colleagues responsible for other aspects of business operations.

For HR leaders, Castlight simplifies benefit deployment, management, and measurement, and allows them to drive employee engagement through personalized communication and offerings for each employee. Furthermore, Castlight offers employees a single platform that integrates all of their health plan, benefits, and wellness solutions, and helps guide them to the right care, provider, or benefit they need.

Take it from Buffett, “a specter much more sinister than corporate taxes is looming over American businesses: health care costs.” Businesses are responsible for paying taxes, but wise business leaders must not sit idly as they watch healthcare costs — or as he calls them, “a tax by another name” — continue to rise to the detriment of their business’ and employees’ wallets. Castlight Health’s health benefits platform empowers employers and employees with the tools and insights needed to take control of their most challenging business expense.