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Small Business Owners Say Healthcare System Needs to Change

Latest Wells Fargo/Gallup survey: small business owners believe health insurance can help attract, retain employees… but current system flawed.

SB Informer
Thursday, September 13, 2007; 06:58 AM

The state of the current U.S. healthcare system remains a primary concern for small business owners, according to the latest Wells Fargo/Gallup Small Business Index. Almost nine out of 10 small business owners surveyed (86 percent) said the current healthcare system is in need of change, with six out of 10 saying a “a complete overhaul” (59 percent) is in order.

“As a small business owner, the success of my practice depends on the health and overall success of my employees,” said Dr. Vacharee S. Peterson of Peterson & Peterson D.D.S. “It’s important that I am able to take care of my employees and provide them with the essential resources and benefits that will keep them healthy and in the office, and ultimately, keep my practice thriving.”

Small business owners were asked what effect adequate health insurance has on a company’s employees. More than three-quarters (84 percent) agreed that adequate coverage attracts the best qualified employees, and nearly the same amount of respondents (81 percent) agreed that it improves employee loyalty. Eighty-three percent believe it reduces an employee’s likelihood to leave a company.

The Index found that over half of small business owners (55 percent) do not offer any health insurance to their employees, citing high cost as the number one reason (45 percent). Of these business owners, 55 percent said they would be “more likely” to offer such benefits if the federal government provided some financial incentives for this coverage.

“The majority of small business owners recognize the benefits of offering affordable healthcare coverage to their employees, but many feel they cannot afford to do so,” said Rebecca Macieira-Kaufmann, executive vice president and head of Wells Fargo’s small business segment. “A third of small business owners are cutting back on non-capital investments so they can provide healthcare for their employees. For several years health insurance has been a major concern for small business owners, and its impact is significant.”

About the Small Business Index

Since Q3 2003, the quarterly Wells Fargo/Gallup Small Business Index has surveyed small business owners on their current and future perceptions of their business environment relating to their business financial situation. The Index consists of two dimensions: 1) Owners’ rating of the current situation of their businesses and, 2) Owners’ rating of how they expect their businesses to perform over the next 12 months. An Index score of zero reflects that an equal number of small business owners are optimistic and pessimistic about their companies’ situation. Results are based on telephone interviews with 603 small business owners nationwide conducted July12 - 23, 2007. The margin of sampling error is ± 4 percentage points.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $540 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest credit rating from both Moody’s Investors Service, "Aaa,” and Standard & Poor’s Ratings Services, “AAA.” Providing financial products and services to more than one and a half million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada. Wells Fargo is America’s #1 small business lender in total dollar volume according to the most recent Community Reinvestment Act (CRA) data (2005).

The second largest national Small Business Administration (SBA) lender in dollars, Wells Fargo is an SBA Preferred Lender in 28 states and the District of Columbia, and originated 4,937 loans for $578 million in 2006. Its diverse business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $33 billion to women and diverse business owners. For more information, please visit www.wellsfargo.com/biz.

About the Gallup Organization

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.