The Leading Edge - Winter 2013 - 5

cover feature

2013 is looking a lot like 2012
for businesses
BY PETE FEHRENBACH

N

ow that President Barack Obama
has won a second term and control
of Congress will remain split for at
least two more years, should U.S.
businesses expect a continuation of
the government policies they’ve seen over the
last four years? Yes and no, prognosticators say.
By and large, our government’s leaders will
keep pushing down the same paths, or trying
to, and thus, the federal government’s
economic policies probably won’t change
much. But there are plenty of new factors
coming into play, some of them highly
unpredictable and well beyond the control of
the government’s leaders.
However, there are several measures that
business owners can and should be taking to
prepare their organizations to perform well
and avoid some minefields as they step onto
the new/old playing field they’ll encounter in
Obama’s second term.
Health of the nation
One of the most important aspects of this
new playing field is Obamacare. The
president’s re-election makes it a certainty
that this initiative, which has already begun
implemention, will continue, with the largest
part of the law going into effect in 2014.
“Obamacare is not going away,” says
Herman Schwartz, a professor in the
Department of Politics at the University of
Virginia. “One-sixth of our economy is health
care-driven, and a huge chunk of businesses in
the health care sector of the economy have to
adapt themselves to the reality of Obamacare
– to the reality of the ‘Medicare-ization’ of
health care – because it’s clear that’s going to
be a long-term trend.”

LEADING EDGE

When the bulk of Obamacare takes hold
as the law of the land, it will initially be
difficult for nearly all businesses in the health
care sector, insurance included, because it will
produce downward pressure on revenue and
greater pressure to deliver better services at a
lower cost. There is going to be pressure to
do more with less, so the overall result for
that segment of the economy is going to be
much slower revenue growth.
The impact on the remaining five-sixths
of the economy remains to be seen.
“There’s no single, simple business story
with Obamacare,” Schwartz says. “It’s going
to produce both winners and losers.”
Other business experts foresee Obamacare
exerting downward pressure on most
businesses economywide, especially small and
mid-sized businesses, because they believe
the law’s tenet requiring companies with 50
or more full-time-equivalent employees to
provide health coverage for their workers will
deter business growth.
“Many companies are trying to get their
arms around the employer mandate,” says
Bill Conerly, a business consultant based in
Lake Oswego, Ore. “It’s a very confusing law.
It’s going to be a nightmare for some
companies, and it’s going to lead some to
decide not to get too big because they don’t
want to grow beyond that threshold without
considering the costs and benefits.”
Peter Morici, a business professor at the
University of Maryland, also believes the new
health care law will discourage growth for
small U.S. businesses.
continued on page 6

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