By Editor, Corporate Crime Reporter.
Richard Master is the CEO of a $200 million a year company – MCS Industries in Easton, Pennsylvania.
MCS is the nation’s leading supplier of wall and poster frames.
Master has a problem. He provides health insurance for his 200 employees.
Last year, he decided to do something about it.
He’s organizing to enlist other business leaders to speak out for the need for single payer health care.
Last year, he made the case in a documentary movie – Fix It: Healthcare at the Tipping Point.
Last month, he released a second movie – Big Pharma – Market Failure.
And next year, he will release a third – a yet untitled documentary about how money in politics is blocking the will of the American people.
Master got involved in the issue of health policy when he was traveling in 2013 in Chile.
“It was one of these spontaneous reactions to a personal situation,” Master told Corporate Crime Reporter in an interview last week. “My son, my wife and I were in Santiago, Chile. My son was introducing us to his future in laws. He developed an asthmatic reaction. He didn’t have enough firepower in his inhaler. We ran out to the local pharmacy, expecting to pay $80 to $100 for an Albuterol inhaler. It was $15. I asked through an interpreter — what about my blood pressure medicine? It was $4. I looked at our future daughter in law and my son and said — we have got to do something about this. And we are going to do something about this.”
“We actually filmed on our iPhones that encounter. It was November, 2013 or so. At the same time, we were confronting in our business the annual renewal negotiating for insurance. And we were facing a higher double digit increase, as we do every year. We are trying to negotiate down to single digits. And we are not having very much success. That whole set of circumstances led to some research on my part. We began to overturn these rocks and seeing what a dysfunctional, messy, inefficient system we have.”
“I talked to a good friend of mine who is a director for the Biography Channel and the History Channel. And I said — you have to come on board. We have to do something about this. It was expected to be modest. And then it turned into a full blown documentary — Fix It: Healthcare at the Tipping Point. Then we have this second documentary — Big Pharma: Market Failure.”
“A third documentary will be more involved with the difficulty in gaining solutions when you have a huge entrenched special interest like our healthcare system.”
Master says a majority of the American people support a single payer plan.
“I just saw the Economist poll last month. Sixty percent of Americans favor expanding Medicare to provide coverage for every American. Sixty-two percent favor creating a new federal program that covers everyone.”
“Eighty percent of Democrats and 43 percent of Republicans support this. Many more Republicans are in favor of this than are opposed to it.”
“The American people are in favor of replacing the Affordable Care Act with a single payer or Medicare for all system. And we are not getting it. And it’s not part of the Congressional dialogue. And we all know why. And we all throw our hands up and say — there is very little we can do about it. And that is a national disgrace. That is an affront to our sense of an American democracy. We have given up on the concept of participatory democracy to allow a major special interest to dominate our society the way it has.”
The gold standard for single payer is HR 676. As of now, 112 members of the House have signed onto it. They are all Democrats. There are no Republicans in the House who are supporting it.
“That’s the great mystery,” Master said. “And why aren’t more corporations signing on to it? Why aren’t more conservatives recognizing that single payer costs less. It’s more efficient. It’s more transparent. These are business disciplines that Republicans in general embrace. But they can’t reach the same conclusions. I don’t think there is a major single payer group in the United States that is advocating that the government take over the delivery of care. We are talking about having the government be an escrow agent. We raise money through taxes and they pay the bill — similar to Canada — and pay it more efficiently.”
“There is gridlock. It’s more partisan gridlock than it is truly ideological.”
Did I get it right from your film that something like 40 percent of your health care expenditures comes from just a couple of patients?
“MCS is the leading supplier of picture frames and decorative mirrors in the United States. We sell to major mass market retailers. We are approaching $200 million in sales. We have about 200 workers in the United States. Most of our products are made overseas. We have a wholly owned subsidiary in Mexico. We have doctors and nurses around the clock in that plant. We have good medical care in that plant at a small fraction of the cost of insuring our employees in the United States.”
How many employees do you have in Mexico?
“Upwards of 700 employees in Mexico.”
“Our cost of insurance in the United States for a single person is about $7 an hour. Our cost for a family member is $12 to $13 an hour. The Kaiser study shows that we are spending over $13,000 to insure a working family. And that is with the high deductible plan — even with those high hourly costs.”
“We do the high deductible plan because every dollar we give to the insurance company is an inefficient dollar vis a vis health care expense. We actually pay the deductible to the employees as they are confronted with it.”
How much of their premiums do you pay?
“We pay about 75 percent, 77 percent if they don’t smoke, of the employee’s premiums. The employee pays the remainder. The employees then have co-pays and deductibles. But we now cover the deductibles.”
Did I get it right from the film that a big chunk of your health care costs comes from just a couple of employees?
“You are absolutely right. Four or five employees in a company our size can really change the whole economics of our company. And they have. One person with cancer can cost now a million in a year. We have two people with Hepatitis C — that was $300,000 to $400,000 in a year. And it’s so dramatic.”
If we had a single payer system in the United States, how would that change your business?
“We wouldn’t have an HR professional involved in the process. We would not be so concerned about the health of applicants for jobs because it wouldn’t be our responsibility to pay for illnesses.”
“We are a good company that respects the laws. But we have a problem in this country that people aged 55 are not highly regarded as potential employees by American businesses because of their vulnerability to illness and the burden they can have economically on the company. Those issues would not be at MCS if we had a Canadian style system.”
You would be paying more in payroll taxes. Your employees would be paying more in taxes. Are you convinced that your company and your employees would be paying less in taxes than you now pay overall in premiums, co-pays and deductibles?
“Certainly. We are approaching 15 percent of payroll for healthcare. A single payer system could be financed with about an 11 percent payroll tax. The employees may pay 3.75 percent and the employer would pay 7.25 percent. That is particularly significant for lower wage employees — employees making $30,000 a year — $15 an hour. They would essentially be paying about $1,000 a year as a premium share. Now, they could be paying $3,000 or $4,000 in premiums and have higher co-pays and deductibles to be concerned about.”
Who is your member of Congress?
“Matt Cartwright is the member for Easton, Pennsylvania. He’s a progressive Democrat and he’s a co-sponsor of HR 676. And for the rest of the Lehigh Valley, it’s Charlie Dent, a moderate Republican. He’s not now in favor of single payer. But he voted no on the Republican plan.”
There are no Republican co-sponsors of HR 676. And it has been rumored that Dent might be one of the first. Do you see that in the cards?
“I see that in the cards if we can mobilize enough support in the district to encourage him to change his position. To date, he has not changed his position. He has seen our movie — Fix It. Charlie is approachable. He’s mostly a reasonable person. If he steps out of line, he’s vulnerable to the attack from the more right wing doctrinaire members of his party who will come in, challenge him in a primary fight. He is a long time member. He’s very well financed. He’s the chairman of the subcommittee for the VA. And as such, he gets substantial contributions from the healthcare sector — including pharmaceutical companies.”
You are organizing to get other corporations to sign on to single payer. The name of the organization is Business Leaders Transforming Healthcare.
How many business leaders have signed on?
“We started the campaign last month with the launch of our movie — Big Pharma: Market Failure. So far, we have about 150 business leaders who have signed on. Many of them are smaller businesses. Some businesses of our size have signed on.”
“Two weekends ago at the Berkshire Hathaway meeting,Warren Buffett gets up and in response to a question, he says that business leaders should not be focusing so much attention on taxation. The real issue is health care, he said. Health care is the tapeworm in the belly of American competitiveness. And his vice chair, Charlie Munger says in an interview shortly after that meeting that he’s for single payer. Munger is a Republican. Buffett is a Democrat. But they both agree that single payer is the solution for American health care. That’s the green light that we needed. An iconic business leader saying — it’s time for you to rethink this issue. We have to do something about this.”
“The aspirational goal of our group is to bring single payer to the United States. But we also want to discipline the healthcare system with basic good business practices. We don’t need insurance companies or pharmacy benefit managers between patients and their doctors or hospitals.”
“Thirty percent or more of health care dollars are just wasted.”
[For the complete q/a format Interview with Richard Master, see 31 Corporate Crime Reporter 22(12), June 4, 2017, print edition only.]