Why Community Small Businesses Are Essential to Health

When people talk about the importance of small business to local communities, they often focus on economics. But small businesses also have a large impact on community health — through their economic impact but also in other ways.

“Health is created at the community level, where small businesses operate,” said Dr. Shantanu Agrawal, chief health officer at Elevance Health. “Given this overlap, small businesses should be thought of as partners in health.”
 

Q.  By definition, small businesses are small. What impact can they really make?

A.   While each may be small, they are significant. More than 30 million small businesses (under 500 employees) operate in the United States, with nearly 13 million in low-wealth communities. Small businesses — from manufacturing and logistics firms to retailers and service providers — represent 99.7% of all employers and employ nearly half of U.S. employees.

Counties with more small businesses have lower prevalence of diabetes and obesity and lower mortality rate.

One significant small business impact on community health comes through economic stability. About 2/3 of money spent with a small business remains within the community. Having a stable economic base will increase wealth across the community as owners and employees of the small businesses support others in their community.

“Providing economic stability is an important tool in improving access to healthcare and improving health outcomes,” said Agrawal.
 

Q.  Beyond economic stability, how can small businesses directly improve health?

A.   “The health of individuals drives the health of the community,” Agrawal said. “With half of company profits going toward health costs, employers have a vested interest in keeping employees healthy.”

Small businesses can directly influence the health of their employees by:

• Providing healthcare coverage, even to part-time employees.
• Offering paid time off and allowing it to be used for preventive care.
• Including wellness benefits as part of their offering, which can reduce sick leave, medical costs, and workers comp claims.
• Investing in food and nutrition education, as every $1 invested provides a $10 reduction in healthcare costs.

In addition to the benefits companies offer, 90% of small business employees felt employee happiness was valued by company leaders. Happiness has been found to correlate with positive health outcomes, including immune responses and cardiovascular health.
 

Q.  Improving health for their employees is one thing. What can small business do to improve the health of the overall community?

A.    A small business can provide a trusted entry point for healthcare.

Gee’s Clippers in Milwaukee, Wisconsin, provides great haircuts, lively conversations, and access to a variety of healthcare services, including COVID and other vaccines.

“The barbershop’s clients really trust them, so they are more receptive to addressing their healthcare needs,” said Agrawal. “Gee’s demonstrates how small business can have a direct impact on the health of their communities.”

Small businesses can make choices in their business model or operations that improve community health:

• Food-related businesses can offer more nutritious options versus predominantly highly processed food.
• Providing paid time off for employees to volunteer on health-related initiatives (health fairs, creating/maintaining recreational areas, providing companionship or transportation for older adults, etc.) can strengthen individual and community health.
• Since small businesses are trusted leaders in the community, they can champion changes, improvements, and enhancements to increase overall community health.
   

Q.  What types of collaborative opportunities are available for small businesses to improve health?

A.   “A synergistic relationship should exist among small businesses, local government, and community-based organizations,” said Agrawal. “A healthy community pays dividends for all of these groups, and each brings something different to the table toward the goal of community health.”

Small businesses donate generously to local charities, sports teams, and events. These community reinvestments provide positive impacts in their communities.

One city where small businesses have been part of a collaborative health effort for decades is Rochester, New York. Business leaders, healthcare providers, health insurers, health planners, and government representatives came together to cooperatively make decisions based on what would have the greatest benefit to the community. The collaborative approach resulted in 33% lower healthcare premiums than the rest of the country and an uninsured rate of half the nation’s average.