Health costs making big business ill
By Quentin Young
A Chicago physician and coordinator of Physicians for a National Health Program
Published May 15, 2005
On April 19, General Motors Corp. blamed its dismal first-quarter results (a $1.1 billion loss) on its $5.6 billion annual health-care tab. On top of that, the company carries $63 billion in unfunded health-benefit costs. The future certainly looks bleak.
Clearly a disaster is looming not only for GM and its workforce, but also for the entire American economy. America’s other largest corporations also face skyrocketing health-care costs; General Electric Co., Boeing Co., Lucent Technologies Inc., IBM Corp., Verizon Communications Inc., SBC Communications Inc. and Ford Motor Co. have a combined $150 billion in future health-benefit obligations. Their future looks bleak too.
Ominously, non-competitive American products are sending our jobs abroad.
From candy to autos, Canadians can produce goods more cheaply because of their markedly lower health-benefits costs. For example, in Canada a Ford costs $1,400 less to make than it does to produce in Michigan. Lifesavers shaved $4 per hour off its labor costs by boarding up its hometown factory in Holland, Mich., and heading for Canada.
Alert pundits are, at long last, calling U.S. business to account.
They are pointing out what has been obvious to all industrialized democratic nations around the world for some time now: Employer-based health-care benefits are a bottomless pit. Seventeen American steel manufacturers have declared bankruptcy and terminated their retirees’ health benefits.
Our nation recently learned that half of all personal bankruptcies are due to unpaid medical bills and illness, affecting 2 million people each year. Corporate bankruptcy of huge proportion looms due to our failure to deal rationally with health-care financing.
There goes America’s vaunted economic advantage.
The obvious remedy, single-payer national health insurance, would end the link between employment and health insurance, while recovering much of the one third of health spending now squandered on “administrative cost,” at least $400 billion in 2004.
These funds would enable our nation to cover everyone with no increase in health spending. National health insurance can cut waste and prudently control soaring costs, something business has learned it cannot do on its own.
Paradoxically, it is America’s traditionally conservative physicians who are learning that the future fortunes of the medical profession, like the success of American business, hinge on reform of health-care finances.
Hence physicians, in increasing numbers, endorse single-payer national health insurance. Single-payer would address seriously the major deficiencies in our system: 45 million people without insurance, prohibitively priced pharmaceuticals, miserable mental-health benefits and the absence of a long-term care strategy for our aging population.
Single-payer would give business a level playing field with international competitors in the global economy by relieving them once and for all of the burden of crushing health benefit costs.
This healthy prescription can cure our chaotic health-care system and, in the process, foster a strong economy.