• Divided We Fail (includes AARP, the Business Round table, and the ServiceEmployees International Union (SEIU); committed to a “search for solutions to health care” – - – by building on private insurance.

• The National Coalition on Benefits (includes more than 50 of the largest corporations and most powerful lobbying organizations, including private health insurers, the Business Roundtable, and the U. S. Chamber of Commerce; they lobby to keep large employers’ insurance plans exempt from regulation)

• Health Care for America Now (HCAN), a coalition of many national organizations, including the American Nurses Association, MoveOn.org, and the Progressive Action Network; their common purpose is to promote “an American solution” which assures universal health coverage “through the largest possible risk pools” for affordable health care in an inclusive and accessible system leaving nobody out; it retains choice of a private health plan.

• Five other organizations — the American Cancer Society’s Cancer Action Network, the American Hospital Association, the Catholic Health Association, Families USA, and the National Federation of Independent Business (NFIB, which represents small business); this group is co-sponsoring the latest Harry and Louise advertising campaign, which expresses concern about cost and access problems, urging that “health care should be at the top of the next president’s agenda. Bring everyone to the table, and make it happen”.

As usual, you can’t tell any of these coalitions’ real agenda by their names. But all of these are committed to preserving the private health insurance industry, and keeping single-payer national health insurance (NHI) off the table. Their message can be very effective by confusing the public, trivializing the debate over policy options, and most importantly, by calling for everyone to come to the table and working toward political compromises which look like reform but are not. Meanwhile, of course, America’s Health Insurance Plans (AHIP), the industry’s trade group, launches its own national propaganda effort Campaign for an American Solution, which argues for “choice” and fails to acknowledge single-payer as an alternative, while the AMA predictably supports continuation of multi-payer financing.

Behind the bland, even patriotic sounding names of these coalitions are conflicts of interest invisible to much of the public. Here are just two examples.

AARP is involved with a lucrative market of supplemental private Medigap plans through United Health; about 60 percent of its revenue (double that from members’ dues) comes from sales of Medigap policies, its membership list, and related activities. AHIP’s conflict of interest, of course, is obvious, but does not restrain its promotional efforts to put itself forward as part of the “reform” process. Since 1999, AHIP has been building its own coalition, the Coalition for Medicare Choices; it includes more than 400,000 senior activists who have lobbied Congress in opposition to cuts in government overpayments to private Medicare plans (already receiving 112 to 119 percent larger payments than traditional Medicare).

In each case, the rhetoric of change obscures the lack of concrete policy changes that could address system problems of health care. Private insurers would like to continue to fragment the market, cherry pick lower-risk healthier people, shift the sick to public financing, avoid regulation, and at the same time receive government subsidies to stay in business.

But private insurers are the problem! As pointed out in previous posts, the private insurance industry and open markets have failed, after many incremental attempts over the last 30 years, to resolve system problems. The critical policy alternative before us is: Multi-payer vs Single-payer.

If we frame the alternatives for health care reform on traditional American values, as arguably we should, single-payer wins hands down. The accompanying graphic compares the two financing options by nine values, in each case with unambiguous results favoring single-payer, on the basis of track record and actual experience, not ideology or rhetoric. Health care is not a partisan issue. It is about every American having access to affordable necessary health care, regardless of age, gender, employment, health status, or race. It is about employers being able to compete in a global market with a healthy work force. It is also about pulling together with social solidarity rather than survival of the fittest (those who can pay).

These comparisons between public and private financing are well documented by many studies over the years. But the political process to date keeps allowing well -financed vested interests to change the subject and delay real reform. That happened in 2006 when the Citizen’s Health Care Working Group, created by the Medicare legislation of 2003 and charged with the task of formulating approaches to address health care system problems. Although almost one-half of the more than 800 participants in two years’ of community meetings around the country had supported single-payer NHI as by far the leading option for reform, the resultant document ignored single-payer and instead endorsed a system of private catastrophic coverage with deductibles as high as $30,000, an option not even discussed in community meetings and mostly opposed in online polls.

It is time to recognize distortional politics for what it is, and get on with making our voices heard. Momentum for single-payer NHI is gathering strength, as illustrated by these examples of growing support:

• There are now 92 sponsors of HR 676 (The United States National Health Insurance Act ) in the House of Congress

• A majority of Americans have supported publicly-financed NHI for at least 60 years, often as many as two out of three in some surveys; a 2005 national study by the Pew Research Center of the People and the Press found that this support crosses party lines, with 59 percent of social conservatives and 63 percent of pro-government conservatives favoring NHI, even if taxes increase.

• 59 percent of more than 2,200 U. S. physicians now favor NHI in a survey earlier this year, as do about 60 percent of physicians in Massachusetts and Minnesota ; the American College of Physicians (the second largest medical organization in the country with 125,000 members) has endorsed the single-payer option, as has the American Public Health Association and the California Nurses Association.

• Organized labor is getting behind single-payer as its employer-based health benefits continue to erode; the AFL-CIO nationally has endorsed the basic principles of single-payer, and a growing number of unions are backing HR 676

The health care crisis challenges our democracy to its core – - – will corporate dollars through deceptively named coalitions continue to trump individual and public will?

“From the beginning of my management of Starbucks, I wanted it to be the employer of choice, the company everybody wanted to work for.  By paying more than the going wage in restaurants and retail stores, and by offering benefits that weren’t available elsewhere, I hoped that Starbucks would attract people who were well educated and eager to communicate our passion for coffee.  To my thinking, a generous benefits package was a key competitive advantage.”

The Starbucks story has been phenomenal.  The company went public in 1992 with a market capitalization of $200 million. By 2004 it was worth almost $19 billion.  Its worldwide work force grew to about 172,000 by 2007, and all of its employees in the U. S., even part-time, are offered health insurance with generous coverage.  From the beginning, the company’s consistent policy has been to offer health insurance to all employees working 20 or more hours a week (240 hours per quarter). As a result, Starbucks has had one of the most loyal work forces in American retail business, with a very low rate of attrition.

But the writing was on the wall.  In 2004, Schultz acknowledged in an interview with Business Week that the company’s biggest challenge to future growth was its health care costs, which by then were costing about $200 million a year for its 80,000 U. S. employees—more than the total it was spending on green coffee from Africa, Indonesia, and other countries. As Schultz said at the time “This is completely non-sustainable”, further noting that companies trying to do the right thing for their employees are paying for the many companies not doing so.

Today, Starbucks is hurting.  Caught in this economic downturn, it has been forced to cut thousands of jobs.  About 600 Starbucks stores in this country will be closed over the coming year, as well as most of those in Australia. This week, the company reported its first-ever quarterly loss, a net loss of $6.7 million. The company attributes its problems to the economy, increasing competition from fast-food companies such as McDonalds (not known for its health care coverage), and perhaps to its rapid expansion.

All of this is predictable. U. S. employers need a healthy work force, but can no longer afford to provide comprehensive employer-sponsored coverage (ESI). The average cost of ESI is now over $15,000 a year for a family of four, with the employer paying for about 60 percent of that and the employee picking up the rest. All of these numbers keep going up each year by three or four times the cost of living and median wages. As a result, more employers are cutting back on coverage (if provided at all), passing along more costs to their employees, and eliminating retiree coverage altogether (eg., General Motors). It is an open question how much longer employers with a social conscience, such as Starbucks and Costco, can continue to offer coverage.

Fortunately, there is a fix for this problem— single-payer national health insurance (NHI) along the lines of the Conyers bill (HR 676) in Congress with 93 co-sponsors.  Both employers and employees would pay less than they do now for better coverage.  By eliminating the waste and inefficiencies of 1,300 private insurers, NHI will save more than $300 billion a year and still guarantee coverage of all Americans. The differences in overhead between private and public financing are striking—Medicare operates as a single-payer system with an overhead of about 3 percent, compared to an average of 18 percent for commercial carriers and 26.5 percent for investor-owned Blue Cross plans.  Under HR 676 employers will pay a payroll tax of about 7.7 percent (less than their average of 8.5 percent now) while individuals will pay an income tax averaging about 2 percent for most taxpayers.

NHI will not solve all of the problems now being confronted by Starbucks and other U. S. employers, but will go a long way to level the playing field in a global economy. We can no longer afford the skyrocketing costs of private health insurance for less reliable and more skimpy coverage each year. Employers and employees alike, as well as our country, will win with NHI.

Howard Schultz has built a legendary company with a social conscience.  But the landscape and business environment is changing fast. He can add to his legacy by taking a leadership role in helping other employers to see NHI as an advantage to their future.

John Geyman is the Author of Shredding the Social Contract: The Privatization of Medicare, Common Courage Press, 2006, and Do Not Resuscitate: Why the Health Insurance Is Dying, and How We Must Replace It, Common Courage Press, 2008, Use only with permission of the Author.

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