Buffalo News Another Voice: Health care costs hurting state’s small, local businesses

January 30th, 2025

January 30, 2025

Read Justin Wilcox’s Piece in the Buffalo News here.

Like many New Yorkers, I listened with interest to Gov. Kathy Hochul’s recent State of the State address. Knowing the many challenges facing New York, especially upstate, it was reassuring to hear that the governor’s focus went immediately to the “affordability” crisis that New York faces.

It was most disappointing when Hochul failed to address one the cost of health care, especially for small, local businesses, their employees and families.

It can be easy to sometimes overlook New York’s small and local businesses, but they represent about 98% of the businesses in the state, employing 40% of our private-sector workforce. They aren’t corporations based in faraway cities, they are our friends and neighbors, and they are struggling to keep up with the ever-growing costs of health care.

We have all been experiencing the impacts of inflation on our budgets at home and at work. For our local businesses, these difficulties are compounded by the fact that inflation on health care continues to grow at a greater rate than the rest of the economy. For instance, in June of last year, medical prices grew by 3.3% from the previous year, higher than the 3.0% overall annual inflation rate. Since 2000, the price of medical care, including services provided as well as drugs, and medical equipment, has increased by 121.3%. In contrast, prices for all other consumer goods and services rose by 86.1% in the same period.

The reasons for these steep increases are many. Undoubtedly leading the charge is the rapidly increasing cost of hospital reimbursement. This growth, which greatly outpaces inflation, is due to many factors, including the consolidation of health care providers into large, multi-state corporate health systems, that use their size to increase prices. Additionally, rising drug costs and hidden health care taxes and mandates add billions to the cost of health care and, in turn, to the cost of health coverage.

As a reflection of the cost of health care, over the last decade, New York’s small-business health insurance premiums have been 23% higher than the U.S. average. This not only puts terrible pressure on local businesses trying to stay viable, but also puts them at a terrible disadvantage to competitors in less expensive states.

The basic formula of no longer allowing corporate hospitals to merge with other hospitals or simply buy up doctors’ practices and then increase the price of services, is very plain. The state should review these transactions and, as a first step, assess the impact of these acquisitions on the cost of coverage. This and other commonsense reforms, aimed at price transparency and fairness would go a long way to alleviate some of the pressure on our local businesses.

If the governor is serious about affordability, she and the Legislature must take substantial steps in this year’s budget to cut the actual costs of health care in the state. Anything less leaves our small, local businesses and the people who depend on them struggling to make it.

Justin Wilcox is the executive director of Upstate United.