Health Care's Drain On Cash Flow
Source: American Express
It's no secret that health insurance is a huge burden on companies' balance sheets. When General Motors revealed in 2005 that it would take its largest quarterly hit in a decade due to a $1.1 billion write-off of health care costs, the investor world woke up to the fact that health insurance is an enormous drain. Small businesses have it even worse. For every small business, "Health benefits" is not an insignificant line item in its expenses line. Small businesses, under pressure in the recession to cut costs to the bone, cannot crawl out from under this downturn without a drastic change in health care.